Several years ago I worked at a law firm with a wonderful office manager named Doyle. One day I went to find Doyle and when I did I told him "we have a problem." Doyle smiled and replied, "Jack, there are no problems, only opportunities." Not believing him I told him that our legal assistant was quitting and that day would be her last day. Without missing a beat, Doyle said "Now that is a problem."
I was reminded of this story when late last week, after months of telling people not to worry too much about the fall of oil prices, I watched the price slide well into the $60 range.
Even if some operators can continue to make money with the price in the $60s, there is no question there will be operational ramifications to these prices. Many operators have reevaluated, or I assume, soon will reevaluate, their 2015 operational plans and budgets.
If operations in the major oil areas slow down, the impact will be felt in many areas. Operators, drillers and service sectors companies will be affected. State and local governments may well see tax revenues decline.
But, as I've posted previously, we've seen the ups and downs of the oil and gas industry before. No high is forever; no low is fatal. The industry and those working with the industry will adapt.
But $60 oil? To quote Doyle, "Now that is a problem."
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