Is the boom back? Drillers to spend $25 billion more in 2017

Oil and gas companies are loosening their purse strings and preparing to pump more oil and gas.

Producers expect to spend $25 billion more this year on capital projects than they did last, an increase of 11 percent over 2016, according to the energy research firm Wood Mackenzie. And they hope to pump 1 million more barrels of oil and gas per day.

WoodMac analyzed figures from the 119 oil and gas firms that have already announced their capital budgets. Ninety-nine expect to spend more this year.

Those with holdings in the lower 48 U.S. states — and particularly those in West Texas’ popular Permian Basin — are “setting ambitious growth targets,” WoodMac said. Companies focused on the U.S. will spend about $15 billion or a whopping 60 percent more this year.

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WoodMac highlighted companies like shale-oil specialists Pioneer Natural Resources, based in Irving, and Houston-based EOG Resources as those leading the spending increase.

(Ken Childress)

Many companies will also begin pumping more oil and gas. Ninety-eight have announced production expectations for the year, WoodMac said, and think they’ll produce 1 million barrels more of oil equivalent per day, an increase of about 5 percent over last year.

Companies focused on U.S. fields account for 80 percent of that increase, a boom of 15 percent over last year.

Not all is rosy. Super majors like Total and Chevron are wrapping up big projects and will likely spend less in 2017. Internationally-focused companies have forecast production declines this year.

And many companies are still testing the waters, WoodMac said.

“Upstream companies may be quietly optimistic about the outlook for 2017,” the research firm said its report, “but many remain cautious.”