By: Jennifer A. Dlouhy
WASHINGTON — The campaign to export U.S. crude has been dominated by large domestic producers hoping to fetch higher oil prices, but on Wednesday, the spotlight was on small businesses with income tied to domestic oil development.
Representatives of those firms, including Roswell, New Mexico-based Read and Stevens, told the House Small Business Committee that overseas oil sales would help sustain their firms, by modestly lifting domestic crude prices.
“The current depressed oil price and the associated cutback in drilling new wells which would create new revenue for us has had a very strong adverse impact on our financial situation,” said Rory McMinn, president of Read and Stevens, a 44-year-old firm that operates about 150 wells. Many of them are considered “stripper” wells, with production of 15 or fewer barrels per day.
Unlike bigger companies with public funding of their stock or ready access to private equity capital, McMinn said, Read and Stevens is hit especially hard by any devaluation of oil reserves or cuts to its cash flow. The company has canceled all but two wells in a 26-well drilling campaign it started in 2014.
If U.S. oil companies could compete for additional customers on the world market, they could “secure a more fair price for our oil” — one that would ripple down to even the smallest producers, McMinn said.
Dale Leppo, chairman of the Tallmadge, Ohio-based Leppo Group that rents and sells construction equipment, said that his firm has seen a big drop off in business along with the decline in domestic crude prices.
West Texas Intermediate crude was trading at $59.97 per barrel on Wednesday, down from a high of $107.26 in June 2014. It was priced about $3 per barrel less than international benchmark Brent crude.
The number of drilling rigs working in Ohio has since been halved, falling from 48 to 22. And the number of machines Leppo Group is renting in the energy sector has fallen by 42 percent since a peak in late 2014, Leppo said.