Exploration and production companies remain concerned about unpredictable oil and natural gas prices, driving decisions about capital expenditures and joint ventures, according to a survey by Grant Thornton and Hart Energy.
Industry officials responding to the survey, released this week, expect Henry Hub natural gas spot prices to average $3.48 per million British thermal units in 2013, rising to $4.09 by 2015.
Prices for West Texas Intermediate crude oil are expected to average $91.18 in 2013, rising to $94.12 by 2015.
The survey tracked attitudes toward capital expenditures, joint ventures, methods of accessing capital and employment trends, among other issues.
“For the second consecutive year, our survey has revealed that price volatility continues to significantly impact the energy industry,” said Brandon Sear, national energy practice leader for Grant Thornton. “These persistent cost issues are … leading many of our respondents to indicate a reliance on hedging production as insurance against price fluctuations.”
The 2013 survey was the 11th conducted by Grant Thornton of upstream U.S. energy companies, looking at attitudes about the industry and market.
Uncertainty about natural gas and crude oil prices ranked as the top concern, just as it did in the 2012 survey.
Access to a skilled technical staff ranked as the third-biggest problem in 2012; that dropped to No. 8 this year.
More than half of companies reported they expect employment to rise for the remainder of 2013, but that rate of increase was down from the previous two years.
And about 60 percent of respondents said they expect to increase their domestic capital expenditures in 2013, down from 63 percent in 2012.
- 53 percent expect company employment levels to rise in 2013, down from 71 percent in 2012.
- Workforce concerns are easing. Only 31 percent anticipate difficulties hiring and retaining employees in 2013, down from 55 percent in 2012.
- 18 percent said uncertain oil prices were the most critical problem for the industry, followed by 16 percent who said uncertain natural gas prices.
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