Federal Reserve Bank

The US onshore business is looking flat at the moment, though these sorts of predictions are prone to sudden shifts.

High prices have predictably led to production booms that end in busts. But in this cycle, the focus has shifted from production growth to cash flow growth.

A recent survey by the Dallas Fed indicates significant improvement in oil and gas companies’ outlooks, tempered by high levels of uncertainty in oil prices, ongoing supply-chain limitations, and workforce shortages. Small operators outpace large operators in expected increases in production.

A recent survey presented by the Dallas Fed offers hints to why production in Texas and neighboring states has not seen a boost from rising prices. One big problem? Workers.

Getting water is a big issue for those who fracture wells, as is the disposal of it. The number of companies investing in water facilities and reuse, though, remains a minority.

Oil prices appear to have stabilized during the past year, and speakers at the annual Energy and the Economy Conference at the Dallas Federal Reserve Bank say they expect prices to remain level, at least for a little while.

The Federal Reserve Bank of Dallas’ quarterly survey of operators and service companies shows an industry still confident in its near-term growth prospects. However, concerns remain about a number of issues, ranging from the steel tariffs to crude oil price differentials in the Permian.

Energy activity has shown solid expansion, but to increase drilling, companies need a higher average oil price compared to last year’s surveys, reflecting a steady increase since 2Q and 4Q in 2017. The ability to find workers and limited pipeline capacity could limit near-term growth.