With the low price of oil putting Tuscaloosa Marine Shale drilling in a “dormant” stage, now’s the time to figure out how to “make lemonade out of lemons,” says Bernell McGehee.
Speaking to the McComb Rotary Club on Wednesday, the Liberty certified public accountant who closely follows and writes about the area oil exploration business said, “We need to try and seize the day” by preparing for when activity heats up in the TMS area, which includes much of Amite and Wilkinson counties.
McGehee, whose column appears in the Enterprise-Journal on Sundays, says it has now been shown that the oil can be recovered through hydraulic fracturing and be commercially feasible at $75 to $80 per barrel.
At recent prices of less than $50 a barrel, companies are only doing enough to hold leases and wells until prices come back.
However, there are still about 75 producing wells that need to be serviced.
“I personally believe there’s some lemonade out there,” said McGehee, who related a family story about traveling to New York City with his wife to visit their daughter.
The plan was to see a Broadway play, but the one they were to attend was canceled due to a strike by stagehands.
They went to another play, where the actors doubled as stagehands, and McGehee was selected to participate in a spelling bee in the production.
“We had a blast,” he said.
It was a classic case of “making lemonade out of lemons” or turning what appeared to be bad luck into a positive.
Right now, he said, people interested in the TMS should gear up to make the most of it when full activity resumes.
He cited as an example a company bringing someone from Texas to repair an air-conditioner at a well site.
Another example was a caterer being brought in from Texas.
He acknowledged that the oil companies like to do business with “people they know,” but added that local service providers, properly equipped and trained, can be more economical to the companies.
Now is the time to assess and prepare for opportunities that will arise in the commercial phase of fracking producting which eventually will come, he said.
