Fed report: Oklahoma, Wyoming eyes $62 oil for drilling increase

By Luke Geiver | January 15, 2018

Oil firms active in Oklahoma, Wyoming and the northern half of New Mexico now believe $62 per barrel is the oil price necessary to increase drilling. The price, according to information gained from the Federal Reserve Bank of Kansas City, comes at a time when “regional energy firms reported somewhat stronger growth last quarter amid stronger oil prices,” according to Chad Wilkerson, economist at the Oklahoma City branch.

In its most recent survey of oil firms represented in its district, Wilkerson’s team found that spending was expected to increase in 2018 compared to 2017 with exploration and production activity showing the strongest increase of growth.

To end 2017, numbers from the survey show that drilling activity increased, revenues and employee hours rose considerably and wages and benefits grew moderately. Future expectations for the same categories also appear to be solid or rising.

In addition to activity-related questions, the survey asked about the impact of electric vehicles, the lifting of the oil export ban and changes to the tax code.

On the impact of electric vehicles or renewable energy, roughly half of the respondents said they faced low risks. Most respondents said the adoption of electric vehicles is limited by declining tax credits, support infrastructure and batter range.

In regards to the oil export ban dismissal, more than half have seen positive effects. The new tax plan—yet to be passed at the time of the survey—drew a response in favor of the tax plan. The biggest impact, respondents said, would be related to expanded drilling.

To view the full survey, click here