Oct. 13–A new survey has found that oil and gas activity accelerated in the third quarter and expectations for future activity remained high in the region that includes Colorado, the Federal Reserve Bank of Kansas City said Friday.
“Regional energy activity grew faster in the third quarter as prices pushed higher,” said Chad Wilkerson, Oklahoma City Branch executive and economist.
The Kansas City Fed’s quarterly Tenth District Energy Survey provides information on current and expected activity among energy companies in or based in the district. The results are based on total activity in the area encompassing the western third of Missouri, all of Kansas, Colorado, Nebraska, Oklahoma and Wyoming and the northern half of New Mexico.
The survey of firms during Sept. 14-28 showed that oil and gas activity increased in the third quarter, boosting the index to 45 from 26, the highest level since early 2017. While other quarterly indexes were mixed, they all remained positive, which indicates expansion, according to the Kansas City Fed.
Anything over zero points to expansion and below zero points to contraction.
The third-quarter survey results showed total revenues and employee hours edged lower, and the employment, wages and benefits and access to credit also fell slightly. Supplier delivery time and total profit indexes declined. The expected drilling and business activity remained high, but dropped from 61 to 50.
Companies reported that oil prices needed to be on average $55 per barrel for drilling to be profitable, up slightly from the past few years but well below current and anticipated prices. Respondents said the average natural gas price needed to be profitable was $3.23 per million Btu, slightly above the $3.16 per million Btu reported by Bloomberg on Friday.
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