Lightstream Resources Ltd. LSTMF

RE:RE:Cash costs dropping with lower oil price & production

[whitehorn1]

xblueboyx, I agree with your comments except "not" accurate analysis at lower oil prices on return to higher prices. Sure oil companies are lowering their costs but at expense of their suppliers, as seen this a few times in boom and bust cycles. Last year typically a construction company charged 250 dollars an hour for a D8 gas to build a big oil lease for instance. Now presently with all the equipment sitting in yards idle with bankers breathing down their necks, that cost may be lowered by 50-100 dollars per hour. Also, a welder who may of charged a 150/hr rate for his welding truck may have to decrease his rates considerably. On top of that, drilling costs I've heard have come down up to 30 percent. So yes, oil companies costs have come down due to companies need the work to pay the bills, BUT if there is any change in the metrics in the price of oil, expect those costs to go up. So "hypothetically" in a "dreamworld" if oil went back to 100 dollars the oil company will most likely have to pay more for the same services.