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Dallas Fed: Surging Costs Hamper U.S. Shale Growth
Posted on 6/24/22 at 7:31 am
Posted on 6/24/22 at 7:31 am
quote:
The business activity index in the energy firms operating in Texas, northern Louisiana, and southern New Mexico jumped in the second quarter to the highest level in six years, but costs continue to escalate and supply chain delays are worsening, the Dallas Fed Energy Survey showed on Thursday.
Activity in the oil and gas sector in the most prolific U.S. shale basin, the Permian, expanded at a robust pace in the second quarter, with the business activity index—the survey’s broadest measure of conditions facing energy firms—up from 56.0 in the first quarter to 57.7, registering its highest reading in the survey’s six-year history, the Dallas Fed said.
For a sixth quarter in a row, costs have risen this quarter, according to the survey of oil and gas executives at 85 exploration and production firms and 52 oilfield services firms.
The index for input costs at the oilfield services companies jumped to a record high, and none of those firms responding in the survey reported lower costs.
Delivery times for materials and equipment for the industry are rising, with many executives reporting significant delays.
quote:
In comments to the survey, an E&P executive said “We are experiencing significant delays in obtaining materials and services, and costs are substantially increasing. We will shortly be ceasing investment in any new operations owing to the combination of rising costs, supply-chain slowness and our view that a recession is coming that will drop oil and natural gas prices significantly.”
“Huge service cost increases, regulatory uncertainty and mixed messages from Washington are keeping me on the sidelines,” another executive noted.
One executive at an oilfield service firm commented: “The supply chain seems stretched to the max in the Permian Basin. There really is not much ability to increase drilling activity.”
LINK
Posted on 6/24/22 at 7:32 am to ragincajun03
Lies. It's Biden's policy that is making everything more expensive and more difficult to obtain not some supply chain BS
Posted on 6/24/22 at 7:39 am to Abstract Queso Dip
quote:
It's Biden's policy that is making everything more expensive and more difficult to obtain not some supply chain BS
I don't think anyone is defending the President and his ill-sighted policies here, but if you don't think there aren't serious supply chain issues on materials in the industry (which have lingered since COVID shutdowns), then you are ignorant.
This post was edited on 6/24/22 at 7:40 am
Posted on 6/24/22 at 7:42 am to ragincajun03
he’s being sarcastic. your sarcasm font must be broken
This post was edited on 6/24/22 at 7:43 am
Posted on 6/24/22 at 7:43 am to ragincajun03
I think there are supply chain issues with positive stories. It's Friday baw. Time for less ragin and more Cajun. The party is going down we can worry about silly metals another day.
Is I am very aware of the supply chain crises. Because let's be honest it is a crises. Can't get forumal, Sriracha, diapers, metal to make machines that make the formula. Etc throw in petro to the mix too. Cows dying and shite.
But it is Friday and your Fridays are a scarce commodity. Enjoy them while you can.
Is I am very aware of the supply chain crises. Because let's be honest it is a crises. Can't get forumal, Sriracha, diapers, metal to make machines that make the formula. Etc throw in petro to the mix too. Cows dying and shite.
But it is Friday and your Fridays are a scarce commodity. Enjoy them while you can.
Posted on 6/24/22 at 7:47 am to ragincajun03
quote:
and costs are substantially increasing
True their costs for equipment and services are increasing, but still not as high as pre- pandemic and certainly not as high as they were in 2014.
Service companies slashed their prices during Covid. Funny how quick the Operators ask for “cost reduction during these challenging times” but are in no hurry to allow you to raise price when price of oil quadruples.
Posted on 6/24/22 at 7:47 am to Klark Kent
quote:
he’s being sarcastic. your sarcasm font must be broken
quote:
Abstract Queso Dip
Apologies, baws.
Unfortunately with the political debate these days that seem to be based on Facebook memes, I have struggles being able to tell what is sarcasm and what someone seriously thinks.
I like posting articles like these on OT rather than PoliBoard if it's not too politically based, because I do believe the responses and discussions are a bit more reality based.
This post was edited on 6/24/22 at 7:49 am
Posted on 6/24/22 at 7:48 am to ragincajun03
quote:
“Huge service cost increases, regulatory uncertainty and mixed messages from Washington are keeping me on the sidelines,” another executive noted.
There's a war on, man!
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