How Companies in the Oil Fields Can Survive Cheap Oil

Consumers and businesses alike love cheap oil, but not if your company is an oil producer or a part of the vast support industry working in the oil fields. Let’s face the fact, that at its height, shale oil extraction coming out of North Dakota and Texas topped out at $140 per barrel. Today with prices hovering between $40 and $60 per barrel, the question begs to be asked, “Why bother with shale?”

And that’s exactly what OPEC wants us to think. OPEC is obviously concerned about an energy independent U.S. and has a standing policy to keep oil prices so low that the shale extraction companies can’t continue to make the same money they were able to, a couple years ago. Maybe that’s why the new drilling rig count is down 60% in the U.S. since late last year. The National Post reported that there are over 4,700 drilled-but-untapped wells just waiting for prices to rise.

Unfortunately, low oil prices don’t just affect the big oil companies. The entire oil support services industry, including companies that provide drilling, seismic testing, transportation services, directional services, infrastructure and even refining services – they all feel the effects of low oil prices. The biggest problem that these companies currently face is limited cash flow. So, until prices rise, how is your company going to weather this cyclical low?

Invoice factoring can maintain your cash flow so that you can continue to take on new projects that have large upfront expenses without having to wait on invoices that will be paid in the next 30-60 days. How would you like to get paid for these outstanding invoices in the next 72 hours? Invoice factoring does exactly that. Universal Funding can process your outstanding invoices and get cash in your hands quickly. Just call Universal Funding at 1-800-405-6035 to get started today.

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