Oil wells shut in, tough for business

Oil wells shut in, tough for business
Posted at 11:45 AM, Mar 03, 2016
and last updated 2016-03-04 17:17:37-05

As prices continue to drag for crude oil, companies are shutting down production.

Each Monday Hathaway CEO Chad Hathaway looks at the numbers and decides which and how many wells to power down.

"Just the cost of electricity alone is over 50% of our cost to get it out of the ground," Hathaway said they're doing everything they can to stay afloat and he's noticed other companies are doing the same.

"You drive by their wells and you speculate and you think wow maybe they're shutting them in because they're uneconomic too, I just don't know," Hathaway said.

Many of the usually squeaking whirring machines have shut down across the county and if you see a still rig, it could mean one of two things: 

1. It's on a timer.

2. It's been "turned off" or shut in.

Hathaway shut in 15-20% of his wells over the past 90 days, and said all of his wells would be running if the price of oil was better.

This is the latest cut back companies have had to do, after laying off employees involved in expansion projects. Hathaway said that could affect how much oil companies can produce once the price comes back up.

When the price does bounce back, for Hathaway it will be as easy as flipping a switch, but for other companies it's more complicated.

"Others of them will have mechanical difficulties and be lost forever or have to be worked over," Mary Jane Wilson, President of WZI Inc.said. Some wells cannot shut down, as they are using steam to bring the oil to the surface.

With wells gone, so are the jobs that maintained them.

Hathaway said oil companies need to find a way to produce oil more cheaply so they can continue producing and expanding to serve the ever growing world.