Originally posted by Guardian Reaper
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Oil: Are we in a long period of low prices due to fracking?
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Originally posted by Artos View PostHow do the current refineries come into play & can someone explain what percentage of light crude vs heavy is needed to produce the various fuels?? I don't quite fully understand but have heard the current refineries are more geared towards still needing a % of heavy crude vs what our frackers produce??
Also, I've heard some chatter about logistics & getting the oil (to the refineries) & mostly the NG (to the various LNG's along the TX coast) via new pipelines from the permian??
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Originally posted by bphillips View PostAll depends on your location. If you’re in the Permian it’s business as usual. Prices aren’t really that low they’re just more stable. Also lots more people and shops have moved into the Permian long term versus just book time so they’re not having to outsource to as many mom and pops in other parts of the state to help with demand. Not near as much machining, service Co, or roustabouting is coming from other parts of the state anymore. If so it’s just for better lead times or availability
The drilling side is still constantly hiring out here
I know of a company in Louisiana (rental tool company) that is doing good business. Averaging 25-30 million a quarter which is pretty good for a small company. They have a shop in Midland and a few in Mexico servicing offshore.
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Consistent oil prices teach people to operate efficiently. Money is harder to get so it is spent much wiser. And it lets companies learn how to operate and turn a profit in the hard times. Easier to learn to cut costs when it’s not do or die and you’re just trying to streamline. We are as busy as ever out west.
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Typical boom/bust cycle in the oil market. This one started in 2014 so we are about 5 years into a cycle. Just look back at the 80's and it was about a 10 year period before we really got back going and making good profits. This is not to say some sectors will be profitable like land based drilling currently. The offshore market is still stagnant and looks to continue that way at least through 2020 or until companies decide to increase CAPX.
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Just my opinion but a lot of the slowdown for many service companies is due to operations streamlining the producers have made, a lot of the old service methods are going/have gone away and being replaced with newer technologies. It's a tough pill to swallow but everyone is going to adapt or go away, no other choices available that I know of. Our company has divested 5 of the services we started out with and are down to 2 both of those, we think will last through several cycles due to govt. regulations!
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