By Georgina McCartney
HOUSTON (Reuters) -Oil and gas activity in the key producing states of Texas, Louisiana and New Mexico declined slightly in the third quarter, as executives there expressed an increasingly negative outlook for the industry, according to a survey released by the Federal Reserve Bank of Dallas on Wednesday.
The drop in activity and production comes amid growing uncertainty around oil prices and increased frustration with U.S. President Donald Trump's administration. Executives blamed
Trump's policies, such as tariffs and a promise to lower oil prices, for hurting the industry.
More than a third of exploration and production executives reported significantly delaying investment decisions in response to heightened uncertainty about the price of oil and the cost of producing oil, while oilfield services executives were also gloomy on the outlook.
"A vibrant oilfield services sector is critical if and when the U.S. needs to ramp up production. Right now we are bleeding," one oilfield executive said in the anonymous comments section of the survey.
Many producers need prices around $65 a barrel to turn a profit. U.S. crude futures have ranged between a high of $70 a barrel and a low of around $62 so far in the third quarter, according to data from LSEG.
"The uncertainty from the administration’s policies has put a damper on all investment in the oilpatch. Those who can are running for the exits," another E&P executive said.
Geopolitical tensions in the Middle East and Europe have helped to support prices, while OPEC+ accelerating its output increases ahead of schedule, as well as U.S. President Donald Trump's tariff policies, have weighed on prices.
DRILLERS LOOK ABROAD
As the best resources in the United States are drilled, more companies are examining opportunities abroad. More than three-quarters of executives said they expect shale oil drilling to become commercially viable in international locations outside the United States, Canada and Argentina in the next 10 years.
Turkish national oil company TPAO signed a joint venture agreement with U.S. oil producer Continental Resources to develop shale fields in the country’s Diyarbakir Basin in March. And Houston-based shale company EOG Resources entered the upstream sector earlier this year in both Bahrain and the United Arab Emirates.
"We have begun the twilight of shale," an executive said, adding "the U.S. isn't running out of oil, but she sure is running out of $60 per barrel oil."
Around 43% of E&P firms said they are expecting a decrease in capital expenditure in the third quarter of this year compared with the same quarter a year ago, while oilfield service firms expect a 42% decline over the same period.
"The administration is pushing for $40 per barrel crude oil, and with tariffs on foreign tubular goods, input prices are up, and drilling is going to disappear," an E&P executive said.
Companies expect a West Texas Intermediate oil price of $63 per barrel and a Henry Hub natural gas price of $3.30 per million British thermal units at year-end 2025.
Data for the survey were collected September 10 to 18. Of the respondents, 93 were exploration and production firms and 46 were oilfield services firms.
(Reporting by Georgina McCartney in Houston; Editing by Mark Porter, Will Dunham, Liz Hampton and Nia Williams)
