Wednesday, July 02, 2025

US Shale to Slow Drilling as Tariffs Rattle Executives

US shale executives expect to drill significantly fewer wells this year than planned at the start of 2025, as lower oil prices and uncertainty around President Donald Trump's tariffs hurt profits, according to a Federal Reserve Bank of Dallas survey.

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More from the article...

... Almost half of oil executives said they expect to drill fewer wells in 2025 than planned at the start of the year, according to second-quarter survey results released Wednesday.

For "large" exploration and production firms -- producing 10,000 barrels per day or more -- 42% said they expected a significant decrease in the number of wells drilled.

Most firms said that tariffs have increased the cost of drilling and completing a new well by 4.01% to 6%. ...


#1 | Posted by LampLighter at 2025-07-02 02:02 PM

Another view ...

Dallas Fed: Oilfield Inflation Surges as Shale Activity Contracts in Q2
oilprice.com

... Oil and gas activity in the U.S. Eleventh District slipped into contraction in the second quarter of 2025, according to the Dallas Fed Energy Survey released Wednesday, with firms citing falling production, deteriorating service margins, and deepening uncertainty.

The survey's headline business activity index dropped from 3.8 in Q1 to -8.1, marking a return to negative territory. Executives pointed to declines in both oil and gas production, with the oil production index falling to -8.9 and the natural gas production index to -4.5, which represents a sharp reversal from moderate growth earlier this year.

Oilfield service providers reported escalating cost pressure, with the input cost index rising from 30.9 to 40.0. Margins compressed further, as the operating margin index deteriorated to -33.4 from -21.5, and the prices received for services index flipped negative, dropping from 7.1 to -17.7. Equipment utilization also softened.

Among E&P firms, cost inflation slowed. The finding and development cost index slipped to 11.4, while the lease operating expense index fell to 28.1, suggesting a slower pace of cost growth.

Labor demand declined across the board. The employment index dropped to -6.6, and the employee hours index fell to -5.1, even as the wages and benefits index remained positive at 10.3.

Outlook sentiment remained pessimistic. The company outlook index came in at -6.4, and the uncertainty index rose to 47.1, the highest since 2020. ...


#2 | Posted by LampLighter at 2025-07-02 02:04 PM

How funny.

Thanks, TRUMP/MAGA.

Too band that oil shale isn't as dependable as wind.

#3 | Posted by Zed at 2025-07-02 02:27 PM

That old Trump economy is dying with a thousand whimpers.

#4 | Posted by Zed at 2025-07-02 02:27 PM

"Shill, baby, shill!"

#5 | Posted by LegallyYourDead at 2025-07-02 04:00 PM

US shale executives expect to drill significantly fewer wells this year than planned

Can't he just order them to drill more, and then order the Treasury to reimburse them for the extra cost?

That Strategic Reserve ain't gonna fill itself.

#6 | Posted by REDIAL at 2025-07-02 04:41 PM

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