The share of exploration and production companies planning to raise capital spending in 2027 versus this year has more than doubled to 22% from 10% in June, according to the Federal Reserve Bank of Dallas Energy Survey released this month.

More than 80 E&P leaders across Texas, northern Louisiana, and southern New Mexico — the Dallas Fed's Eleventh District footprint, home to the Permian basin and Eagle Ford — responded to the poll. A third said their oil production increased over the past three months, and only one in eight reported lower output. Both readings slipped slightly from the June survey.

On the spending side, 46% of respondents said third-quarter capex exceeded second-quarter outlays. That figure, too, edged down from the prior poll.

2027 expectations shift

What has changed more substantially is the outlook for 2027 spending. Only 5% of E&P executives now expect to trim capex next year, while 73% plan to hold spending flat. Three months ago those figures stood at 10% and 81%, respectively. The 22% planning increases compares with less than 10% in June.

The shift suggests regional production should climb from here as producers move to capture consistently high prices for their barrels — even though benchmarks have retreated from recent highs.

Jon Costello, an analyst at HFI Research, said an industry response to higher prices — with Texas firms in the vanguard — similar to the recovery that began in late 2016 would lift total US output more than 4% to about 14.4 million b/d.

"If production is moving toward that level, shale will have shown it can still respond to higher prices," Costello wrote. "If it remains near last October's record of just under 14.0 million barrels per day around year-end, I think we should begin changing how we think about the US oil industry."

Costs and uncertainty weigh

The fact that most E&P leaders in and adjacent to Texas are not pressing the accelerator also reflects rising costs and persistent uncertainty, driven mainly by the Iran war. Dallas Fed researchers noted in their report that "all cost indexes were above their series averages, suggesting costs are growing at a faster-than-average pace."

The survey's measure of uncertainty among E&P and oilfield services firms changed little from the second quarter, but the bank's analysts observed that producer responses reflected a significantly higher level of uncertainty. That showed up repeatedly in the comments researchers collected.

"It is very challenging to select a planning price or budgeting price," one respondent said. "Companies must look at the steep backwardation and budget off of a $65 per barrel or $70 per barrel price while operating expenses per barrel and finding and development pricing is increasing quickly."

For operators in the Permian and Eagle Ford, the survey points to a gradual tightening of the supply response: more firms willing to spend into 2027, but with budget decks still built on WTI strip assumptions in the mid-$60s to $70 range rather than spot highs.

The watch item: whether fourth-quarter Dallas Fed data confirm the capex intentions with actual 2027 budget announcements, and whether US crude output breaks above October's record of just under 14.0 million b/d by year-end.