The fall in oil prices, which began midyear 2014, didn’t wipe out gains the oil and gas industry saw that year as revenue, reserves and production grew, according to a study released this week.

So did capex and costs.

But the 2015 story, which is still being written, is already a stark contrast as companies adjust—by cutting costs, improving techniques and turning to technology—to oil prices hovering around $60/bbl instead of the $100-plus highs of last summer.

“It’s a much different world today when you’re looking at current prices and forward price curves,” said Herb Listen, a partner in assurance services for EY, noting the anxiety felt when prices dipped into the $40s. “It takes time for companies to find those efficiencies and make money in this pricing environment. The strong will survive providing that they have the liquidity.”

Total capex increased 16%, reaching $202 billion, in 2014 compared to $173 billion in 2013, EY said in its annual U.S. oil and gas reserves study. Although revenues rose 10% to about $217 billion, costs went up.

The study, which analyzes publicly-disclosed information from the largest 50 companies based on 2014 end-of-year oil and gas estimates, showed that proved and unproved property acquisitions costs experienced the most growth, each rising more than 20% to about $27 billion. Development costs rose to about $121 billion, up 15%; while exploration costs increased to just under $24 billion, up 6%.

In addition, oil reserves and production for the study companies jumped by 8% to about 27 billion barrels (Bbbl) and by 18% to just more than 2 Bbbl, respectively, in 2014.

Listen said the industry will see increased production this year because of investments made in prior years. But there will be a point, he said, perhaps later this year or early 2016 when production decline curves will kick in and uncompleted wells will show up in the figures.

EY noted that impairments, which totaled about $23 billion in 2014, were especially impacted by low commodity prices at year-end, particularly for independents that follow the full-cost accounting method.

Today’s market conditions could also impact future plowback percentages, which fell to 129% last year.

“Oil and gas companies are putting more money into the ground than they are getting,” EY partner John Russell said, adding the percentage probably won’t be higher than 100% this year given companies’ projected spending cuts.

The industry will continue adjusting to the current price environment, he continued. Survival will come with a combination of innovation and technology, lower prices for services and perhaps consolidation, if conditions worsen.

Technology

Techniques such as multi-well pad drilling and better completions technology helped boost production, mainly from shale plays. But oilfield service companies continue to roll out new technology aimed at improving operations and growing production.

“The technology is going to improve on how they are fracking, what they are using to frack and what are the patterns they are going to drill,” Russell said. “The oil and gas industry is a high tech industry in the United States. They will solve their issues and they will make money. It will just take time to learn.”

Prices, Costs

In the meantime, service companies in general are trying to help oil companies stay active and survive, he added. “They’ve got to lower their prices to keep busy. I think that is really a fact of the market.”

Most notable drilling and completions costs have dropped in shale plays, something Listen said has been highlighted in companies’ quarterly earnings calls this year.

More mergers, particularly of medium-sized companies, could be on the horizon to lower overhead costs, Listen added.

M&A Activity

Some had already anticipated the downturn to bring a downpour of M&A activity, but there has been only a trickle. Why? Companies have been able to negotiate with lenders, Listen explained. Plus, oil prices have climbed a bit. However, don’t expect to see more borrowing for the sake of increasing capex, he said.

“There are a lot of buyers out there in the market that really want to buy right now,” Listen said. “But there are not many sellers that are willing to sell at this current price. It depends on how strapped those sellers really are.”

Then, there are other factors—such as changing energy demand, regulations, geopolitics, Iran nuclear deal developments and OPEC action or inaction—that could send the sector into a frenzy impacting production, spending and prices.

“There is always the black swan out there that could change everything up,” Russell said.

Contact the author, Velda Addison, at vaddison@hartenergy.com.