IMHO you shouldn't have posted those figures. Because if anyone care to do some sums, they would be cause of concerns.
Now, consider that a well can cost up to $7miilion dollars and the current profits, (GROSS PROFITS THAT IS) amounts to only $20 to $30 per barrel, it would take up to 350,000 barrells of oil to recoup the original costs outlayed. And, with the daily flow of oil as they currently are in the oil shale reserves, how long would it take to recoup those costs.
Now if the price of crude would go back up to the $100 per barrell it would be a different scenario. But currently it is not. And, IMHO it won't be for a long period of time either. The price of crude is and has been too volatile and the oil traders, who usually control the prices, aren't prepared to take any risks. Some of them got burnt very badly the last time they did, (with holding crude at the $140 per barrel only to see it drop to the $40 to $50 dollar mark), because they weren't expecting the market sentiments and that the Arab Countries were continuing to pump and increase production to meet their committments with the drop in the oil value. At the same time though, the demand for fuels was decreasing due to the GFC and the shortage of money going around.
Please DYOR.
Buddy
MPO Price at posting:
$1.09 Sentiment: None Disclosure: Held
