Still, some companies can be expected to produce more to take advantage of elevated prices.
“While the big companies are not going to go crazy and are staying the course,” said Trent Latshaw, chief executive of Latshaw Drilling, which operates rigs in Texas and Oklahoma, “the private equity guys, you will see increased activity from them. Hundred-dollar-a-barrel oil, even $90 oil, is a boon for them.”
Private equity firms have replaced investment funds and banks in the oil patch, as they establish small companies and then flip them to bigger companies looking for more acreage, mostly in Texas, New Mexico and North Dakota. Small producers, which are responsible for about one-tenth of American output, also plan to pump more.
“Everything I’ve got is on and going at full speed,” said Darlene Wallace, chief executive of Columbus Oil Company, an Oklahoma operator with 25 oil wells. Ms. Wallace said she had been holding back an investment of $100,000 to fix one well, but that is about to change.
“When oil is at $60, I’m not going to do that, but I’m just about ready to put the work in it,” she said. “At $100 a barrel, I can put that sucker back to work.”
Source Article from https://www.nytimes.com/2022/03/09/business/energy-environment/russia-oil-global-economy.html
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