((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
*
Nearly half of those surveyed believe that megamergers will weigh on production
*
Half of companies don’t plan to use artificial intelligence
*
Most leaders are aware of efforts to extract lithium from wastewater
(Added details on production outlook to paragraphs 3-4, and gas and lithium outlook to paragraphs 7-9) by Georgina McCartney
Oil and gas activity in Texas, Louisiana and New Mexico increased slightly in the second quarter of 2024, the Federal Reserve Bank of Dallas said Wednesday in its quarterly survey of energy companies.
Second-quarter oil and gas production was little changed, according to executives surveyed. The survey covered 90 exploration and production companies and 48 oil service companies. The survey was conducted between June 12 and 20.
Just under half of the 130 executives surveyed expect a slight decline in oil production if the wave of mergers continues over the next five years. However, executives at companies that pumped 100,000 barrels or more all said they did not expect their production to be affected, the Fed said.
“The majors are not going to deplete their reserves to increase domestic production until the supply and demand curves reach their targets. They do not need to participate in conveyor belt drilling to maintain the income at a rate that allows reserves to be developed and loans to be repaid,” one of the people interviewed said.
Costs rose at a slightly faster rate for oilfield services, but at a slower rate for exploration and production companies, the survey found.
The Dallas Fed’s employment index was positive for the 14th consecutive quarter, but the low single-digit reading suggests a slowdown in overall hiring, the survey showed.
Seventy-one percent of executives said they were aware of attempts by oil and gas companies to extract lithium from the brine of oil fields. But 73% said it was unlikely their company would do so.
On average, respondents expect a West Texas Intermediate oil price of around $79 a barrel at the end of 2024, according to the survey, up from a forecast of $80 in the previous quarter.
Meanwhile, 14% of E&P company executives surveyed said low gas prices in West Texas will have a significant negative impact on their companies’ drilling and completion plans in the Permian through the end of this year.
Half of the executives surveyed do not use artificial intelligence and have no plans to do so in the near future.
The appeal of artificial intelligence was most evident at larger companies in the survey, or those producing 10,000 barrels per day or more. In contrast, among smaller companies, those producing fewer than 10,000 barrels per day, only about 16% used AI.
