Ernest & Young recently reported that U.S. oil and gas investments have been at its highest peak in at least a decade. What’s contributed to this fact?
One of the main reasons is the tight oil and natural gas liquids activity that is happening here on our very own soil in the United States.
With tight oil and natural gas liquids development, there are a lot of risks involved for E&P companies.
Experts have to be precise on the tight oil drill spot and the extraction of natural gas and then turning it to a liquid form is a complex process.
Because of the complexity of these two developments, the major exploration and production companies have to invest more money and time. Studies indicate large U.S. oil companies increased their E&P spending by 20% from previous year.
While oil companies are seeing an increase in their spending, they are experiencing a 58% decrease in their after-tax profits due to the cheap rates for natural gas.
It would be ideal if our vehicles can operate on natural gas because there’s an abundance of it! Unfortunately for now, we will continue to pay soaring gas prices to make up the cost to produce what we essentially need every day by the oil & gas E&P companies.
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