Financial analyst Frank Holmes recently wrote an editorial in Forbes magazine praising the ingenuity of Texas fracking companies. It’s only due to this ingenuity and efficiency, he wrote, that West Texas producers can remain profitable, even though oil prices are still hovering around the range of $50 a barrel.
The continued profitability is largely due to the fact that these companies have been able to tap shale deposits that were considered unreachable a decade ago.
In fact, as of this month, total U.S. shale oil output is expected to climb above 6 million barrels a day for the first time ever. Texas shale oilfields alone have exceeded 4 million barrels a day. Recent research suggests that oil would need to drop below $45 a barrel for some West Texas wells to become unprofitable. Texas ingenuity, noted Holmes, has been responsible for keeping barrel prices low enough for emerging markets to afford to buy Texas oil.