$MDMP Permian Basin And WTIhttps://www.globenewswire.com/news-release/2021/06/15/2247047/0/en/MDM-Permian-Inc-Permian-Basin-And-WTI.html Last summer, during the height of the COVID outbreak, oil prices slipped to sub-zero numbers. This was due entirely to the worldwide shut down of businesses. There was no market for crude and as stockpiles increased, prices decreased until the worst possible scenario played out and oil went to -$37 per barrel.
One year later the markets have started to rebound and with changes in political winds, the price of crude oil is roaring back to life. Not only is the world back in business but with the Biden Administration, prices can only be expected to continue to increase.
Add to that the turmoil within the horizontal shale drilling community and the scenario for higher energy pricing is abundantly clear. The Permian Basin horizontal drillers are experiencing a slowdown of investment capital, problems with parent/child wells being too close together and high operating costs, sometimes approaching $40. per barrel. There has also been a flood of bankruptcies due to the low prices and shutdowns.
MDM Permian, Inc. is in the fortunate position to take full advantage of the upward trend in pricing. “$70.00 oil is temporary” says Michael Rafael, President of MDM, “with all the factors going into the markets right now, we believe $80.00 per barrel is around the corner. Our focus is on vertical wells and our LOE’s are under $10. per barrel. We are in the process of making some significant acquisitions in our area of interest. Most are low producing Canyon Sand wells with behind pipe reservoirs. Once we have the wells and associated leases in our portfolio, we expect to start re-working some of the old wells and begin drilling new wells. This should all come to fruition by the end of the 3rd quarter of this fiscal year.”