Capital costs will likely increase for oil and gas companies in 2022, following lower capital expenditures and less drilling in 2021, according to Pittsburgh Business Times.

The Institute For Energy Economics and Financial Analysis tracked 28 oil and gas producers last year, who racked up $40 billion in revenue — the most since 2014.

The independent analysis organization predicted capital spending for those companies, which was about $21.7 billion in 2021, would rise because of inflation, higher numbers of well completions and the fading number of wells that had been drilled in years past but not finished.

The number of drilled but uncompleted wells in the Appalachian Basin has been decreasing in recent months as companies focused on completing the wells they’d drilled but had not yet put into production. There were 511 drilled but uncompleted wells in Appalachia in November 2021, down 26 from the month before.

Completing a drilled well is roughly 30% the cost of a new well, which is why many companies shifted their business models in 2021 as prices recovered. However, if they want to keep production at the same level, new drilling will have to occur.

Learn more: Pittsburgh Business Times > Reports predict oil and gas companies will have higher capital costs in 2022