As prices fall, small companies are getting squeezed along with the big players. Steve Plants is the co-owner of Plants & Goodwin Inc. in Pennsylvania, which operates stripper wells. These kinds of wells make less than 10 barrels of oil per day, and owning is about volume — the more wells, the more oil. But unless business owners diversify their services, effects of the price drop will be hefty.
On how business is going:
Well, it’s not good. We’re in better shape than some simply because we’ve diversified over the last 40 years, and we do a lot of things in the oil field industry. Unfortunately, I think very telling is, the biggest part of our business right now is plugging wells for other customers. A lot of them are old wells. Their life expectancy is at the end, and they’re an environmental hazard when they get that way…. Because of the way our business is set up, we pay our people pretty well. We have full health care benefits that we pay a 100 percent of. Our cost to operate and keep employees is pretty expensive, so we’re losing money every day at $40 oil.
On the state of the oil industry:
When you put in all the other things that are going on right now, it doesn’t look good. The glut of oil that’s out there right now. The dollar is really strong, which is also bad for the price of oil, and weak demand. It’s bad news for us right now.
We’ve seen a lot of ups and downs. You can go all the way back to when Drake drilled his well and see that. We’re hoping it corrects itself, but we don’t know how long that might take.
On what he’s doing about it:
If you decide you’re going to plug them all, you’re somewhere in the neighborhood of $5 to $10,000 to plug those wells, so that’s a pretty good expenditure of cash that has no chance of ever paying back.
As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.
Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.
Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.