Is the BOOM over?

I don't know anything about the daily operations of how the fracing works or however they do it up in northern Alberta, but I do know it costs a fixed amount per barrel to extract the oil. If that number is say $15 per barrel and they can sell it for $100 they are making pretty good coin. If they can only sell it for $60 they might be just paying the bills. The lower it falls the bigger the % of the cost to extract the oil and it eventually gets to a point where it isn't worth while. The day that Americans go to the gas station that costs more and puts a sign out front "this station employs Americans, buy here!" and pay for that, yeah right ... look what happened to manufacturing ... I think we are in for (relatively) inexpensive oil/fuel for at least a few years ...

 

Its on a slow down. The Eagle Ford shale in Texas can drill and frack down to the $50 dollar mark, then its cost prohibitive. But I've already seen several oil drilling rigs being stacked down here. Its a toss up of how much the companies owe, their overhead, etc.

 

also might need to think @ futures contracts. another thing to keep in mind is it gives obama the chance to kill keystone since oil is so "cheap." anyway, we're still busy hauling a mountain of sand to south texas. Chalk Mountain just south of ft worth is looking to hire @ 75 drivers between now and early next year just to move sand, so somebody seems to know something i don't.

 

fracking costs a lot more than traditional oil drilling, so as the global economy is taking a dump, and oil prices fall, it will only hurt the fracking industry.

it was such a big boom, and so fast, I am scared to see what happens when everything suddenly goes bust. And it will, it's only a matter of time.

I think you really have to be desperate for money to want to drive a truck up there.

yeah you will make big bucks, you will also never sleep, never see your home, and deal with a local economy with consumer goods and the housing space that are priced way above the national average, if you can even find housing.

spotty and shady equipment and maintenance as far as the trucks go, if you won't drive it somebody else will.

North Dakota is almost as bad as Siberia in the winter, sometimes it's worse.

I don't know why everybody acts like going to the oil field is such a dream job.

it chews people up and spits them out quicker than the regular trucking industry does

 

Chalk Mountain hauls sand only for EOG (Enron oil & gas). Over the last year and a half, maybe longer they have been drilling, fracking, then capping wells all over SE New Mexico and around the Pecos area. In fact there is one ranch outside of Pecos with dozens of wells ready to go(start pumping oil) but has been idle. I didn't know at the time why, but it would seem Enron has a boat load of money tied up in wells that haven't even pumped a drop of oil yet.
Just like OPEC large USA companies can weather low prices for a while. With interest rates as low as they are i would guess low prices for a year or more would be no problem for them.
When i first got into the oilfield some older drivers said save your money for the slowdowns. ####, were they right. Back in 07' & 08' it slowed down a lot, but there was still work. It didn't pay well but things turned around, they always do.
Just like the economic cycle (up & down) things will get bad, owner ops will sell there trucks at a loss, smaller mom and pop operations will go under and the boom will come back.........be ready!

 

most fracing companies. are running on loans.. and 2 big well known banks. are about to absorb close to a 1 trillion dollar loss. from facing defaults.

opec has consistently said they won't cut production, and saudi has consistently said it won't raise prices.

it won't be long before fracing companies start folding.

and for those that don't beleive the internet. maybe they should start watching well known news sources that have been around longer they have.

as for making big money. what you make, you spend. motels are WERE $700 PER WEEK last year. haven't been up there this year so i have no idea on priceing these days.

 

OPEC(at least Saudi Arabia) is "trying" to kill/hurt fracking by over supplying market by making it cost prohibitive. I'm happy for any war to the bottom on pricing!!! If the US companies think long term, which I believe they do, they'll stick around thru this...Or pay govt to do something...

 

The large global companies and many of the American based companies have a hugh amount in cash reserves. What is a better investment. Drilling wells and capping or leave in saving/ investment bonds where they collect 1-4% return.
Invest the money in wells than they can write the expense off the income tax return.
Just because the price of oil (today) is lower there still is a demand for oil and the price will go up again. Then pump the wells already made.