Oil and Gas Executives Report Improved Outlook Under Trump 2.0

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--As President-elect Donald Trump prepares to return to the White House, oil and gas companies operating in the Southwestern U.S. said their outlook for 2025 has brightened somewhat, buoyed by the prospect of significantly shorter approval times for federal permits, among other things.

In the Dallas Federal Reserve Bank's quarterly energy survey of oil and gas companies, conducted in mid-December and released January 2, business activity in Texas, southern New Mexico and northern Louisiana increased slightly in fourth quarter 2024, according to oil and gas executives who responded to the survey. The business activity index, the survey's broadest measure of the conditions energy firms face in the bank's Eleventh District, increased from -5.9 in the third quarter to 6.0 in the fourth quarter, the bank added.

The company outlook index turned positive in the fourth quarter, increasing 19 points from -12.1 to 7.1, "suggesting mild optimism" among firms, the survey said, adding that the outlook uncertainty index declined 26 points to 22.4.

Donald Trump is one of the best friends the oil and gas industry has ever had in the White House, and a lot of the improved outlook among companies operating in Texas, southern New Mexico and northern Louisiana seems to be propelled to his impending return to the White House. During his campaign, he vowed to restore "American energy dominance," partly by cutting red tape and streamlining the federal permitting process.

One-third (33%) of the 66 exploration and production (E&P) executives who responded to the Dallas Fed survey said they expected "significantly shorter" permitting times over the next four years while another 35% said they expected "slightly" faster permitting times in the second Trump administration. Just over 1 in 4 (26%) said they expected permitting times would be about the same during Trump 2.0.

Click on the icon at right to see a distribution of survey results from executives at 66 E&P companies.

On the question of federal permitting, one E&P representative said this: "The change in political landscape is helpful insofar as regulations, but it appears that crude oil prices are headed down." A second had this to say: "We're assuming that the new administration will encourage more development of oil and gas projects," while a third E&P official commented, "The new administration should have a positive effect on the economy, thus lifting the oil industry." A fourth E&P official said, "We are anticipating that regulatory compliance issues will decrease, primarily due to an incoming administration that is pro-business and pro-fossil-fuel production."

The moderate uptick in outlook also is seen in modest increase in planned capital expenditures (capex) this year compared to 2024. Executives from 132 oil and gas companies answered this question: representatives of E&P firms (85 respondents) as well as oilfield service firms (47). While only about one in seven (14%) executives said they planned to "significantly" increase capital outlays this year compared to 2024, more than four in 10 (43%) said "slight" year-over-year increases were planned for this year. The "significantly increase" crowd included 17 small E&P firms and 15 oilfield services firms. By contrast, 36 large E&P firms, 46 small E&P firms and 40 oilfield services firms said they plan a "slight" boost in capex outlays in 2025 compared to 2024, the survey said. "Small" E&P firms produced less than 10,000 barrels of oil per day while large producers produced over 10,000 barrels of oil per day.

But optimism was not universal in the Oil Patch: Approximately 1 in 10 respondents said they planned to reduce capex either "significantly" or "slightly" this year.

Click on the icon at right to see how planned 2025 capex outlays compare to 2024 outlays.

On average, the Fed survey said, respondents expect a West Texas Intermediate (WTI) oil price of $71 per barrel at year-end 2025; responses ranged from $53 to $100 per barrel. Just over half (51%) said WTI prices would end this year somewhere between $70.00 and $74.99 per barrel. When asked about longer-term expectations, respondents on average expect a WTI oil price of $74 per barrel two years from now and $80 per barrel five years from now. WTI spot prices averaged $70.66 per barrel during the survey collection period.

Click on the icon to show a distribution of responses about WTI prices at yearend 2025.

Survey respondents also said they expect natural gas prices to rise, with Henry Hub prices reaching $3.19 per million British thermal units (MMBtu) at year-end 2025. Longer term, respondents on average anticipated a Henry Hub gas price of $3.63 per MMBtu two years from now and $4.16 per MMBtu five years from now. For reference, Henry Hub spot prices averaged $3.04 per MMBtu while the survey was being conducted.

Reflecting the continued rangebound prices for oil, two-thirds (66%) of respondents said they have not increased their 2025 planned investment compared to three months ago. One-third (34%) said they had increased their planned investment since that time.

When it comes to where respondents will be increasing their spend in 2025, 68% of respondents said drilling & completion while far fewer said acreage/mergers & acquisitions, exploration or other. The numbers exceeded 100% because respondents were allowed to indicate multiple areas of planned increased investment.

One E&P executive made this top-line comment about 2025: "The recent election result is changing outlooks. The new administration will lift regulations, stop subsiding green energy and seek LNG [liquefied natural gas] build-outs to place more demand on natural gas." Another simply said, "We are more optimistic."

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).