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What’s Up With Gas Prices?

From: Riggs Eckelberry
Los Angeles, March 2, 2015

Good morning!

Retail Gas Prices Take Off

It’s pretty dramatic.

Gas prices, which hit an all-time high last April and then went on a long decline, have been recovering steadily since the start of the new year.

In fact, you could call it a “whip-back” in high-price areas like Los Angeles (red line below)!

Gas Prices Chart 1

Crude itself is trading sideways

On Saturday, Forbes contributor Jesse Colombo wrote:

WTI [West Texas Intermediate] crude oil is stuck in a $10 trading range between $45 and $55 per barrel as it continues to cross above and below the heavily-watched $50 psychological level. A decisive break above or below this trading range is necessary to confirm WTI crude oil’s next directional move.

In other words, wait and see.

I’m no expert, but it seems to me like the worst may be over, and a slooow recovery may be in the works.

Crude Oil Chart

What does this mean for frack water cleanup?

The nine-month slump in oil prices has been tough on the oil and gas industry. It’s forced operators to cut costs, or go out of business.

Treating and reusing water saves money… lots of it. So it’s attractive to operators.

How much money?

$150,000 saved per frack job by treating and reusing contaminated water (and a typical well can get a dozen frack jobs, meaning a million dollars or more per well).

$4.20 saved per barrel of oil for produced water treatment (slated to go to $8.10 by 2020, as the industry treats a greater percentage of their water).

Sources: Shale Play Water ManagementBluefield Research

But… it takes money to invest in treatment technologies. That’s why it helps that prices are (slowly) going back up.

A leaner, richer oil industry

As the industry recovers, it will be a much leaner and tighter business. Old, lazy methods will have been scrubbed out.

New technologies — that save real money — will see broad adoption.

As always in the technology life cycle, we’re seeing the smarter operators invest now.

With our Bakersfield site humming, our own “JL” Kindler left last night for a lightning trip to China to cement new deals there…

I’ll cut it off there, but expect much more in days to come.

Have a great week!
Riggs and Team

Riggs Eckelberry
President & CEO
OriginOil, Inc. (OOIL)

Safe Harbor Statement:

Matters discussed in this update contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this update, the words "anticipate," "believe," "estimate," "may," "intend," "expect" and similar expressions identify such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein, and while expected, there is no guarantee that we will attain the aforementioned anticipated developmental milestones. These forward-looking statements are based largely on the expectations of the Company and are subject to a number of risks and uncertainties. These include, but are not limited to, risks and uncertainties associated with: the impact of economic, competitive and other factors affecting the Company and its operations, markets, product, and distributor performance, the impact on the national and local economies resulting from terrorist actions, and U.S. actions subsequently; and other factors detailed in reports filed by the Company.

 
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