While second quarter saw slight activity increases, oil and gas firms in the U.S.’ 10th District saw a moderate decrease in activity for the third quarter of 2019, according to results of the Kansas City Fed’s 3Q energy survey released Friday.

Drilling and business activity for energy companies in Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico and western Missouri fell from 7 to -23, which indicates a significant drop in activity.

The Dallas Fed quarterly survey of the 11th District (firms in Texas, northern Louisiana and southern New Mexico) also noted a drop in 3Q activity.

The 10th District saw declines for the following indexes in 3Q:

• revenues
• supplier delivery time
• profits
• employment
• access to credit

The index for wages and benefits remained positive in 3Q while employee hours index remained flat.

Year-over-year indexes didn’t fare too well, either. Drilling and business activity, capital expenditures, delivery time, employment, employee hours and revenues and profits all declined in 3Q. The access to credit index was flat and while the wages and benefits index eased a bit in 3Q, it was still highly positive.

Respondents also indicated that they needed an average oil price of $55 per barrel for drilling to be profitable. This was up slightly from $52 in the 1Q (survey questions are alternated each quarter).

Regarding natural gas prices, respondents expressed they needed an average price of $2.91 per million Btu to be profitable. This was lower than $3.02 in 1Q.

To contact the author, email Valerie.Jones@Rigzone.com

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