US drillers could see more revenue in 2017.
US drillers could see more revenue in 2017.

North American oil companies were hit hard in 2015 and 2016 when prices took a turn for the worse. And since their operations were on average more costly and more difficult to run compared to now, there wasn’t a lot of room for error (read: impossibly small or negative margins).

All of this could be turning around in 2017, however. USA Today noted Western producers face better odds in the new year thanks to rising oil prices putting much-needed capital back in their respective coffers; and with that money, companies can revitalize once-dormant operations and investments.

On the radar
Forty-five North American oil companies filed for bankruptcy in 2015. As did another 70 in 2016.

These figures highlight just how difficult the road has been for U.S. shale producers – it’s simply been too expensive to extract oil, much less sell it at rock-bottom prices.

The one sign of promise, however, is that those companies that do remain – those that weathered the proverbial storm – are leaner, more experienced and better leveraged than before. And as oil prices rose, these companies are prepared to reap the rewards from their time spent patiently waiting for a market rebound.

Further, the number of active rigs in the U.S. is less than 60 percent of what it was at its peak, meaning there’s more than enough room for companies to expand and bring additional rigs online.

One of the key benefactors from a U.S. oil resurgence may be Texas, according to Fuel Fix.

The Lone Star State accounted for 20 percent of all U.S. oil and gas spend in 2016, and companies are poised to pump even more money into the area. The West Texas Permian Basin in particular will draw more investment and drilling in 2017 because it is on the whole cheaper and easier to access than some of the other more arduous basins in North America.

If global oil prices reach $70 per barrel in 2017, as many analysts expect, the U.S. will re-enter the market en masse. It may not be enough for new companies to get their start, but it is certainly the direction that existing companies are looking to head in.