I guess the Saudis were right, if they forced the worldwide price of oil lower, U.S. Oil corporations would bailout since their drilling costs (due to fracking) are too high.



A North Dakota Oil Boom Goes Bust

The Atlantic By Mara Van Ells

In a field of brittle yellow grass and clotted mud about five miles north of Dickinson, North Dakota, stands a cemetery of sorts. Drilling rigs stretch into the sky like tall skeletons. The occasional lone truck rattles along a dirt road. Otherwise, the location is deserted.

Similar graveyards have been popping up across the western half of the state since the price of oil sharply declined last fall. These once-great moneymakers that drew thousands to the state are now idle, or “stacked,” in the lingo of the oil fields. As more and more companies have stopped drilling following the decline in the price of oil last year, the term has become all too familiar.

During the good times, jobs were plentiful and businesses prospered. High-school graduates earned six-figure salaries in the oil fields, and cash flowed into the hands of those lucky enough to own the mineral rights to land rich with oil. North Dakota’s sudden success coincided with an economic slump in the rest of the country; job seekers rushed to the state fleeing hard times. For seven straight years, North Dakota boasted the lowest unemployment rate in the country. Early this year, it slipped from that coveted spot.

Though many native North Dakotans remembered the oil bust in the late 1980s, this time it was easy to believe that the boom would last. “Your grandchildren’s grandchildren will be working in the Bakken,” Lynn Helms, director of the North Dakota Department of Mineral Resources, said in October. Just over a year ago, North Dakota was producing more than one million barrels of oil per day, more than any state but Texas. This time around, it seemed, things would be different.

But as soon as the price of oil dropped late last year, things began to unravel, and rigs started to close. Of the 192 drilling rigs active in April of 2014, just 94 were open one year later.


Read the entire article here: http://finance.yahoo.com/news/north-dakota-oil-boom-goes-133000021.html

Last edited by Rongone (6/27/2015 5:27 pm)