Dallas, Texas, December 18, 2025
According to the latest energy survey from the Federal Reserve Bank of Dallas, oil and gas production levels in New Mexico and Texas saw minimal changes in the fourth quarter of 2025. This stability occurs amid concerns over weak oil prices and ongoing geopolitical uncertainties. The survey highlights key findings related to production levels, cost trends, capital expenditure plans, and employment outlook, indicating cautious sentiment among producers. With the Permian Basin’s significant contribution to U.S. oil production growth, stakeholders are closely monitoring these trends for future strategies.
Dallas, Texas – Oil Production in New Mexico and Texas Shows Minimal Change in Q4 2025, Reports Dallas Fed
Oil and gas production in New Mexico and Texas remained largely unchanged in the fourth quarter of 2025, according to the Federal Reserve Bank of Dallas’s latest energy survey. This stability comes amid concerns over weak oil prices and ongoing geopolitical uncertainties.
Key Findings from the Dallas Fed Survey
- Production Levels: The survey indicates that oil and gas output in Texas, Louisiana, and New Mexico experienced minimal changes during the fourth quarter.
- Cost Trends: While cost increases have slowed compared to previous quarters, oilfield service firms reported slight declines in equipment utilization and operating margins.
- Capital Expenditure Plans: Large exploration and production firms plan to maintain capital spending at 2025 levels, whereas smaller firms may slightly increase their spending.
- Employment Outlook: Over half of the surveyed firms anticipate stable employment in 2026.
- Price Projections: Respondents expect West Texas Intermediate (WTI) oil to average $62 per barrel and Henry Hub natural gas at $4.19 per MMBtu by the end of 2026.
Background Context
The Dallas Fed’s energy survey reflects the cautious sentiment among oil and gas producers in the region. Despite technological advancements and efforts to boost domestic energy production, the industry faces challenges such as fluctuating oil prices and geopolitical uncertainties. In September 2025, U.S. crude oil production reached a record high, with New Mexico contributing significantly to this output.
The Permian Basin, spanning parts of Texas and New Mexico, continues to be a major contributor to U.S. oil production growth. Between 2020 and 2024, ten counties within this basin accounted for 93% of the nation’s oil production increase.
As the industry navigates these challenges, stakeholders are closely monitoring production trends and economic indicators to inform future strategies.
FAQ
What did the Dallas Fed’s Q4 2025 energy survey reveal about oil and gas production in New Mexico and Texas?
The survey indicated that oil and gas production in New Mexico and Texas remained largely unchanged during the fourth quarter of 2025, amid concerns over weak oil prices and geopolitical uncertainties.
How did oilfield service firms perform in the fourth quarter of 2025?
Oilfield service firms reported slight declines in equipment utilization and operating margins during the fourth quarter of 2025.
What are the capital expenditure plans for exploration and production firms in 2026?
Large exploration and production firms plan to maintain capital spending at 2025 levels, while smaller firms may slightly increase their spending in 2026.
What are the employment projections for the oil and gas industry in 2026?
Over half of the surveyed firms anticipate stable employment in the oil and gas industry in 2026.
What are the expected oil and gas prices by the end of 2026?
Respondents expect West Texas Intermediate (WTI) oil to average $62 per barrel and Henry Hub natural gas at $4.19 per MMBtu by the end of 2026.
Key Features of the Article
| Feature | Details |
|---|---|
| Survey Findings | Minimal change in oil and gas production in Q4 2025; slight declines in equipment utilization and operating margins for oilfield service firms. |
| Capital Expenditure Plans | Large exploration and production firms to maintain 2025 spending levels; smaller firms may slightly increase spending in 2026. |
| Employment Outlook | Over half of surveyed firms anticipate stable employment in 2026. |
| Price Projections | WTI oil expected to average $62 per barrel; Henry Hub natural gas at $4.19 per MMBtu by end of 2026. |
| Industry Context | U.S. oil production reached record highs; Permian Basin counties contributed significantly to production growth. |
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