Saturday, 24 January 2015

Fracking Investment - The facts.

At this point of low oil prices American explorers/investors must be wondering just what they got themselves tied up in. We spotted the following paragraph in an article dealing with 'The Cost of Cheap Fuel' in the current issue of Time Magazine..................

'But while job numbers will decline, production won't - at least not at first. Fracking is capital intensive, so the operators ranging from huge outfits to hundreds of private-equity backed partnerships, have borrowed billions of dollars through junk bonds and private placements. Even if the wells aren't profitable, they can't be shut off - the bond payments still have to be made, so the cash is still needed. There's also huge asset shuffle taking place as firms are forced to sell distressed drilling projects.'

I think we could have told them that. Ed.

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