The share of exploration and production (E&P) companies planning to add to their capital spending in 2027 versus this year has grown to 22% from 10% in June, a new Federal Reserve Bank of Dallas survey shows.
Of the more than 80 E&P leaders in Texas, northern Louisiana, and southern New Mexico who responded to the latest Dallas Fed Energy Survey earlier this month, a third said their oil production has increased over the past 3 months and only 1 in 8 said they’re pumping less oil. On the capex side, 46% said their spending this quarter was up from this year’s second quarter. Both of those data points were down slightly from the Fed’s June poll.
What appears to be changing more substantially on the ground in the Permian basin, Eagle Ford, and other areas in the Dallas Fed’s footprint are expectations about 2027 spending. Only 5% of E&P leaders now expect they’ll trim capex next year while 73% said they’ll keep spending level. Three months ago, those figures were 10% and 81%, respectively.
That means 22% of executives now think their capex will climb in 2027 compared to less than 10% 3 months ago. And it suggests that production in the region will climb from here as producers look to take advantage of consistently high prices for their products—even if they’ve retreated from their recent highs.
Jon Costello, an analyst at HFI Research, said an industry response—with Texas firms in the vanguard—to higher prices similar to how it recovered starting in late 2016 would grow total US production more than 4% to about 14.4 million b/d.
