02-12-2015, 10:44 PM
Beset by falling prices, the oil industry is looking at about 50,000 existing wells in the U.S. that may be candidates for a second wave of fracking, using techniques that didn’t exist when they were first drilled. New wells can cost as much as $8 million, while re-fracking costs about $2 million, significant savings when the price of crude is hovering close to $50 a barrel, according to Halliburton Co., the world’s biggest provider of hydraulic fracturing services.
Drillers Take Second Crack at Fracking Old Wells to Cut Cost - Bloomberg Business
Job cuts are inevitable as oil and gas companies watch commodity prices tumble, but layoffs today could have significant ramifications for the sector tomorrow. For a variety of reasons specific to the industry, energy companies could find themselves in a situation later where skilled workers are hard to replace.
Energy layoffs could come back to haunt oil firms
The thing about the oil and gas markets is that traders are typically looking further down the road. It is widely expected that the supply/demand balance will tighten up in the 2nd half of 2015, so I reasoned that traders would start to position themselves well before that time. I explained the underlying basis of my prediction in that initial article, and then elaborated in the article preceding this one — Why $50 Oil Won’t Last. In a nutshell, I don’t believe the situation in 2008 — when oil prices fell into the $30s — applies today for two reasons.
Tom Kloza, chief oil analyst at Oil Price Information Service, predicted that oil prices would bottom during the second quarter of the year "simultaneously to one of the expirations of the WTI contracts." He warned that the price of West Texas Intermediate crude (New York Mercantile Exchange: @CL.1) could be in the $30s at some point in the second quarter.
Top oil analyst: The worst is yet to come - Yahoo Finance
Rather than wait for their price insurance to run out, many companies are racing to revamp their policies, cashing in well-placed hedges to increase the number of future barrels hedged, according to industry consultants, bankers and analysts familiar with the deals.