
Originally Posted by
Melonie
^^^ again, not wanting to cause any undue alarm, but from what I'm seeing, the major issue with many of the Bakken ( and other state ) gas and oil drillers is the fact that these companies went into business by borrowing huge amounts of money to pay for property leases, drilling rigs, etc. At < $60 per barrel price levels, it's now questionable whether or not these indebted gas and oil drillers can continue to make their loan / bond payments thus allowing them to stay in business. However, this may take a few months to 'hit home'.
And, indeed, those companies which have 'deep enough pockets' to survive losing money for a few months may very well wind up 'sitting pretty' next year, once oil prices rise again but weaker 'competitors' have been driven out of business.
I should also probably point out that there are 'two ends' to this situation. Besides the 'high production cost' oil and gas drilling companies being at risk of losing money and defaulting on loan / bond payments, so are the big banks and 'rich' investors who loaned them the money and/or bought their bonds. As such, besides negative financial effects on oil and gas production areas, there could also be a large negative financial effect in Manhattan, in London etc., as oil related investment losses take a big 'bite' out of banking / investment industry year-end bonuses etc.
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