OT - Grumpy Old Man Thread

[MikeDeTiger]

Back when I worked in that industry, we were always happy when gas prices were a little higher.  When they drop too low, for too long, is when everybody started getting laid off.  

[FearlessF]

greedy evil billionaires  

[Cincydawg]

Oil prices TOO low can be a problem overall.  Around four years back I thought EVs would suppress oil prices longer term, and maybe they will ... someday.

[utee94]

It's so weird in my neck of the woods, these people actually are happy when the price of crude jumps.  The county has been the #1 oil producer in the State for the past ~60 years.

I guess if you have interest in a well pumping a few hundred barrels a week, it's worth the $.90/gallon jump to put in your Escalade.

One of my good friends has oil wells on family property down in South Texas.  They won't even bother to pump when oil is less than $75.  But then they start pumping, he's literally making millions. I expect he's about to buy another house somewhere in Europe or something.  

Great work if you can get it.

[betarhoalphadelta]

A supply / demand imbalance (in the "shortage" direction) is the reason I'm in a position to work with a financial advisor...

Wait... That should go in the happy thread 

[MikeDeTiger]

One of my good friends has oil wells on family property down in South Texas.  They won't even bother to pump when oil is less than $75.  But then they start pumping, he's literally making millions. I expect he's about to buy another house somewhere in Europe or something. 

Great work if you can get it.

Does he operate his own wells?  If so, he already had $$$ before the oil money.  If he doesn't, the decision likely isn't his, and also, I probably leased him at some point.  Well, maybe not, but I did more than my fair share in south Texas. 

Most people lease their land to production companies, and sometimes the force majeure clauses are tricky to navigate.  Most modern leases stipulate that the contract is voided if wells are capped for X number of days.  otoh, what you mentioned happens a lot.  Many--if not most--producers aren't interested in continuing production if the price of oil drops too low.  There does come a point where it's more expensive to bring it to market than what they can sell it for, so they'd rather just let it sit and sell the inventory at a higher price later.  It often results in some unfortunate situations where landowners are locked into leases that aren't helping them and keeping their property off the market for another producer more willing to do something with it, because the lessee waits almost until that X number of days goes by, starts up the well, cranks out a barrell (or the bare minimum cubic feet, if it's a natural gas well), shuts down the well again, and keeps the lease in force for another X number of days. 

Land owners get real bent out of shape about that. 

[utee94]

Does he operate his own wells?  If so, he already had $$$ before the oil money.  If he doesn't, the decision likely isn't his, and also, I probably leased him at some point.  Well, maybe not, but I did more than my fair share in south Texas. 

Most people lease their land to production companies, and sometimes the force majeure clauses are tricky to navigate.  Most modern leases stipulate that the contract is voided if wells are capped for X number of days.  otoh, what you mentioned happens a lot.  Many--if not most--producers aren't interested in continuing production if the price of oil drops too low.  There does come a point where it's more expensive to bring it to market than what they can sell it for, so they'd rather just let it sit and sell the inventory at a higher price later.  It often results in some unfortunate situations where landowners are locked into leases that aren't helping them and keeping their property off the market for another producer more willing to do something with it, because the lessee waits almost until that X number of days goes by, starts up the well, cranks out a barrell (or the bare minimum cubic feet, if it's a natural gas well), shuts down the well again, and keeps the lease in force for another X number of days. 

Land owners get real bent out of shape about that. 

I assume someone else operates it, it's family land and they've been pumping for decades upon decades.  It's also an operating ranch and we used to go down there and camp and shoot and stuff.

As for the lease, I have no idea how it operates, but he makes between hundreds of thousands and millions of dollars every time they decide to start pumping, so he's fine with whatever deal he's got.

He's actually a Methodist minister, he was my youth pastor way back in the day.  He's fine with or without the money, but he certainly doesn't mind it when they decide to give him millions of dollars.