Shale Patch Feeling the Cost Creep as Workers Return to Drilling
With oil exploration beginning to ramp up after last year’s crash, producers are finding that developing their wells is getting more expensive.
A pump jack operates just outside of Midland, Texas.
Photographer: Matthew Busch/BloombergExplorers in the U.S. shale patch are starting to see signs of higher costs as drilling begins to ramp up after last year’s historic crude crash, according to the latest poll conducted by the Federal Reserve Bank of Dallas.
The oil price needed to profitably drill a new well is $52 a barrel, executives from almost 100 producers said in the bank’s latest quarterly survey. That’s an increase of 6%, compared with when the question was asked last year. To cover costs on existing wells, companies need $31, which is 3% more than than last year. West Texas Intermediate crude futures traded at about $60 on Wednesday.