Kansas Fed reports that drilling activity in the US Rockies and Midwest has fallen for the seventh consecutive quarter.

According to survey results released by Federal Reserve Bank of Kansas City on Friday, oil and gas activity in U.S. Midwest Rockies and Midwest declined in the third quarter. This is the seventh consecutive quarterly decline.

The survey was conducted in mid-September and covered companies drilling in Kansas as well as Colorado, Nebraska, Oklahoma, and the northern half New Mexico.

Chad Wilkerson is the senior vice-president of the Federal Reserve Bank of Kansas. He said that the activity in the region will not be rebounding in the next few months.

Wilkerson predicted that activity would increase over the next six-months in the Kansas Fed's last survey.

A number of respondents to the survey noted that low gas prices had hurt their business. Drilling in the area of operation must be profitable at $3.43 per million British Thermal Units (mmBtu), and $4.24 for an increase in activity.

Henry Hub natural-gas futures traded at around $2.65 a mmBtu last Friday. Since early 2023, they haven't risen above $4 per million Btu.

Unnamed participant in a survey said: "The easiest barrels to produce have been produced." Natural gas must be near $4.00 to make it profitable to develop other than associated gas. (Reporting and editing by Diane Craft, Bill Berkrot, and Liz Hampton from Denver)

(source: Reuters)