The oil companies operating in Wyoming have held off on hydraulic fracturing. Instead they are waiting to complete the projects of the newly drilled oil wells that will save money during the low oil prices.
The oil prices are floating low at around $50 a barrel. Hydraulic fracturing critically adds more value to the cost of developing a deep oil well. The process of sand and chemicals as well as pumping pressurized water involves into the wells to crack open the deposits.
EOG Resources declared the plans to delay the fracking process in Houston. It is planning to delay 285 wells. Likewise, other plans to delay the Chesapeake Energy project until 2016 falls in line too. It was to complete the 100 wells. Similarly, Devon Energy is also cutting back on fracking crews in the Oklahoma City.
Many oil wells have reached peak production soon after they get drilled. Hence, it is advisable for companies to wait for wells to complete after the oil prices are on a high front, said analyst with WRTG Economics.
The question is would the companies complete a 1,000 barrel per day well and still get $50 per barrel. Or would they rather wait for a couple of months and then receive a $70 per barrel. This trend has been observed in the market.
The trend has important implications in Wyoming. Around 75 percent of employment in the oilfield has services like fracking.
Major service giants Halliburton, Baker Hughes, and Schlumberger also announced critical cutbacks in their specific payrolls in the past recent months.
Companies are trying to hold their costs down at this point as things have slowed down considerably.