DALLAS — Oil and gas activity saw continued growth in the fourth quarter of 2022, although at a slower pace, according to oil and gas executives responding to the Federal Reserve Bank of Dallas Energy Survey.
According to a press release from the Federal Reserve Bank of Dallas, the business activity index grew for the ninth straight quarter at 30.3 compared to 46 the previous quarter.
“The oil and gas sector experienced another quarter of strong growth, but the pace of expansion slowed relative to the record-breaking levels seen earlier this year. Costs continued to rise across the board, but survey results suggest they did so at a slower pace than last quarter,” said Michael Plante, Dallas Fed senior research economist and advisor in the press release.
Key takeaways from the survey:
- Employment, hours, and wages and benefits rose in the fourth quarter
- Support service firms reported that utilization of equipment increased, with that index at 32.8 vs. last quarter’s value of 55.2.
- Oil and natural production continued to increase, although at a slightly slower pace compared with the prior quarter, according to executives’ responses.
- Costs continue to rise across the board but at a slower pace relative to last quarter. The finding and development cost index was 52.5 vs. 64.7; the index for lease operating expenses came in at 48.4, down almost 22 points from the third quarter; the input costs index fell about 22 points this quarter, coming in at 61.8.
Executives cite inflation and/or supply chain bottlenecks as biggest obstacles to production increases, the press release said.
The Federal Reserve Bank Energy Survey samples oil and gas companies headquartered in the Eleventh Federal Reserve District, which includes Texas, southern New Mexico and northern Louisiana. Many have national and global operations, the press release said.