Everybody I run across asks me the same questions these days. 1) What do you think about these oil prices? And, 2) In that you SELL oil, how are you holding up at these low levels?

As for 1), What do I think? Well, I think the price of oil is pretty low! And as sure as I am of THAT, I am sure that prices will go back up.

All the pundits and talking heads (who only get paid if they have something to say) have a theory. Some blame the high supply side of the equation. Surely that is a factor. It seems to me that some of the “new” shale producers simply got greedy and over produced and in turn, shot themselves in the foot by leaving an over-supply in storage tanks around the country. Of course, another theory is that the OPEC folks conspired to “squeeze” these same US shale oil producers by manipulating downward pressure on oil prices. After all, THEY don’t want to see an energy-independent America! Another theory that seems valid. Yet others feel that the squeeze is directed toward the Russians, in order to choke off their income and slow down their aggression. Or, maybe directed at Iran. Clearly, opinions are in full supply! And with all that being said, and there being an element of validity across the board, one fact remains. And that is, NOT ONE oil producer on the planet is happy with these low levels. In fact, most NEED a substantially higher selling price to justify production; to stay in business! And for that reason, we at Civron Petroleum firmly believe that we will see a return to the “new normal” of $70-80 per barrel, and perhaps north of that as time passes. That wraps up the first question I referred to.

As for 2), we will “hold up” fine! We produce shallow wells across several South Texas counties including Medina County (our home), Bexar County, Atascosa, Guadalupe, Zavala, and Dimmit Counties. Our shallow wells, most above 2000’, didn’t cost $10 mil each to put online, nor do they create the operating expense of wells that are 2 miles deep and 1 mile horizontally create. We can get by with much lower prices than the “big guys”. So yes, we have tightened the belt a bit, streamlined a bit and continue to maintain and operate our wells and continue with our growth plans.

Surely, we will have more to say, probably sooner than later. Stay tuned.