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I have my doubts. TX and ND can reopen wells pretty quickly, so there is a max limit on the price going up. Plus, fracking efficiency is going to go up with b

I have my doubts. TX and ND can reopen wells pretty quickly, so there is a max limit on the price going up. Plus, fracking efficiency is going to go up with better techniques.

Analemma_ 7y ago
They can, but there is a question of whether they will. Even before coronavirus Wall Street was getting annoyed at how US fracking seemed to be a money pit with no ROI; these producers may not find it easy to get the capital they need to restart production.
pixl97 7y ago
Eh, not really. I live in Texas and had worked for a company that developed a software product for management of things like oil leases. The big issue is not the inability to re-open oil wells, it's not that hard. It's the people. When you shut in production you lay people off. Eventually they go elsewhere. This is a big problem in oil boom/bust cycles. Getting trained operators that don't mess up the equipment or cause environmental disasters is one of the bigger problems. Also, once shut in, the operators that survive the downturn will want to open later, than earlier. They can profit more by waiting.
- protomyth 7y ago
  Talking to friends in the west, they are keeping a lot of operators on pay still. I guess it is a how long thing. I'm hoping all the folks with one of the tribes that made a lot of cash on oil put some away for a rainy day.
  - bluGill 7y ago
    The oil companies have learned and try to keep some staff around. However they can only keep so many and for so long. If this is a fast recovery as some expect then the people will be needed next summer and it was a smart decision. If not...
snarf21 7y ago
I was listening to some a podcast when oil first dropped and they were saying the issue is that a lot of the small producers are on leases and then may have to pump at a loss just to keep it and try to make it up later. Or burn everything they already spent. A lot went all in and levered up and are now stuck.

I have my doubts. TX and ND can reopen wells pretty quickly, so there is a max limit on the price going up. Plus, fracking efficiency is going to go up with better techniques.

Analemma_ 7y ago

They can, but there is a question of whether they will. Even before coronavirus Wall Street was getting annoyed at how US fracking seemed to be a money pit with no ROI; these producers may not find it easy to get the capital they need to restart production.

pixl97 7y ago

Eh, not really. I live in Texas and had worked for a company that developed a software product for management of things like oil leases. The big issue is not the inability to re-open oil wells, it's not that hard. It's the people. When you shut in production you lay people off. Eventually they go elsewhere. This is a big problem in oil boom/bust cycles. Getting trained operators that don't mess up the equipment or cause environmental disasters is one of the bigger problems. Also, once shut in, the operators that survive the downturn will want to open later, than earlier. They can profit more by waiting.

protomyth 7y ago
Talking to friends in the west, they are keeping a lot of operators on pay still. I guess it is a how long thing. I'm hoping all the folks with one of the tribes that made a lot of cash on oil put some away for a rainy day.
- bluGill 7y ago
  The oil companies have learned and try to keep some staff around. However they can only keep so many and for so long. If this is a fast recovery as some expect then the people will be needed next summer and it was a smart decision. If not...

snarf21 7y ago

I was listening to some a podcast when oil first dropped and they were saying the issue is that a lot of the small producers are on leases and then may have to pump at a loss just to keep it and try to make it up later. Or burn everything they already spent. A lot went all in and levered up and are now stuck.