In Southwestern US, the continuing shale oil production has lead to increasing energy self sufficiency. Shale oil production has benefited from technology uses and fracturing to unlock the oil in the shale. In an article by Clifford Krauss of New York Times News Service the good news is the oil can be unlocked and according to Sven Del Pozzo an expert of the Permian Basin at the energy consultancy IHS Markit – some of the wells are monsters and tremendously profitable. Those are music to ears of investors. The merger of Concho and RSP Permian for $9.5 billion will mean the company with 27 rigs will be the area’s largest drilling and hydraulic fracturing operation on 640,000 acres.

The good news is oil is being produced, the bad news is pipelines to ship the oil to the refineries lag behind. The use of rail helps but is more expensive. The price of oil lead to companies laying off workers, now they need field workers and truck drivers. On Wall Street, when oil prices were closer to $100 a barrel, it was easy to make money with prices of $60 to $70 it is good but not great.

More the giants of the oil industry Exxon Mobil has 275,000 acres in New Mexico and over the next 5 years expects to spend $50 billion on oil and gas production.

Linking to dividend producing stocks, it is hard not to have either the pipelines or oil companies in your portfolio. As long as there are wells which are tremendously profitable they are a long term hold.

There are more questions than answers, till the next time – to raising questions.