Texas-based oil giant Carson Energy may have figured out a means to completely scoff at even the lowest of oil prices.
The industry can’t remove its gaze away from Carson. This week, the company released new analysis that shows rich Texas oil fields can be profitable at just $15 a barrel.
“Many investors feel you have to be getting over $60 per barrel for oil to be profitable, but that’s only on expensive shale plays,” Michael Johnson of Carson Energy stated in a press release. “Carson operates in rich Texas blanket sands where it’s possible to make money when prices are as low as just $15 a barrel.”
Investors are nervous at best with all the variables intruding on crude oil prices. However, many oil industry experts say this is often the best time to invest in new exploration and development. Wells and production are then in place when prices go back up, that is if a company can hold out that long. Experienced energy investors refer to this situation as one ripe for “double dipping.” An investor can benefit from very cheap drilling costs, and then have oil in production just as energy prices spike again.
Such a payoff is inevitable. Demand, although sluggish, is increasing worldwide.
“Once the extra supply of oil that’s on the market from expensive shale plays and tar sands has been used up, the global economy may find its way under-supplied and then it’s off to the races with high oil prices again,” Johnson said.
Carson hasn’t devolved information on exactly how $15 per barrel could work out in reality when many companies can’t survive on $40. But if anyone has figured it out, Carson would be a great guess. The company prides itself as the low cost leader that actually created oil and gas joint venture partnerships during the 1980’s oil boom. Carson not only survived previous busts, they ended up prospering.
“We have more experience than any of our competitors because we created this way of doing business. We’re like the General Electric of private oil and gas partnerships,” Johnson said.
The firm recently made headlines when they announced the Lone Star Collection. It’s a series of promising oil fields spanning 4 counties along the heavily productive Texas Gulf Coast. The Carson fields total nearly 7 square miles, with projected revenues exceeding $1 Billion Dollars. Analysts believe there are between 15,892,000 and 54,536,000 barrels of light sweet crude ready to be pumped.