Leases dwindling during economic crisis

On October 9, 2008 — No comments

The economic crisis we’re facing in the U.S. has seeped into the oil and gas industry. Lease offers are dwindling as well as the lease bonus dollars being offered for the few that are out there. The cause? Even though oil and gas companies are thriving amidst the new technology which allows them to drill in unconventional shale plays, these operators use credit rather than cash to conduct drilling operations. As many are realizing, it’s difficult to purchase anything on credit due to our current eonomic situation. Oil and gas companies are facing the same predicament and must trim their exploration efforts until it’s feasible to borrow again. In addition oil and natural gas prices have softened making it less profitable to operate.