Oil and gas activity in three key energy producing states rose modestly in the third quarter, according to a survey released on Wednesday, but cost increases continue.
Exploration is driving the increase, with the survey’s business activity index, reaching 10.9 in the third quarter, from zero in the second, the Federal Reserve Bank of Dallas said.
The survey showed new optimism in the oil patch. The results of a poll of executives with 147 energy firms in Texas, Louisiana and New Mexico, pushed up the Bank’s index of oil and gas production activity to 26.5 in the third quarter, from 8.0 in the second quarter. Its gas production index also rose to 15.4, from 2.1 the prior period.
More than half the executives surveyed said they expect oil consumption to be slightly to significantly higher in 2050 than it is today. A third said they expect consumption to be slightly lower to significantly lower. Another 15% see consumption the same.
Costs rose for the 11th consecutive quarter, the oil and gas firms reported, with finding and development costs index up to 18.3 from 14.9. The oilfield service firms cost index slipped to 33.4 from 41.2.
(Reporting by Curtis Williams)