The president of a Texas oil company warns of layoffs and a potential slowdown in drilling next year as OPEC+ producers flood the market and drive down prices.
With the clock ticking as 2026 is weeks away, not all oil companies will be walking into the new year optimistic.
“I think what [oil producers] are seeing right now, especially with the flooding going on by OPEC+, means you’re not going to see much more activity than what we’re doing right now. The production side seems to be staying busy, but if you’re in the drilling side, there’s been a lot of layoffs going on there,” described Kirk Edwards, President of Latigo Petroleum.
In recent weeks, the prices of oil have reached lows of $58/bbl after recent activity overseas.
Edwards explains why energy companies are seeing these fluctuations.
“The main issue lies with Trump asking the Saudis to overproduce [oil]. It’s definitely had an effect. I mean, there could be as much as three to four million barrels a day [of] oversupply on the market right now, starting in the winter months,” projects Edwards.
“The main issue lies with Trump asking the Saudis to overproduce [oil]. It’s definitely had an effect. I mean, there could be as much as three to four million barrels a day [of] oversupply on the market right now, starting in the winter months,” projects Edwards.
Which he describes as a hit to West Texas.
“If that’s true, then you’re going to see this price keep being depressed where it is right now, which isn’t going to be good for this area. We have to see an oil price sustained in the $70 to $75 range, not for one month, but for a 12-month period for people to get back and drill [and] back on the economics where we’re at the start of [2025],” explained Edwards.
Latigo Petroleum refers to two different entities: a 2006 acquired oil and gas company based in Tulsa, Oklahoma, and a separate, current oil and gas company, Latigo Petroleum, LLC, based in Odessa, Texas. The name “latigo” also refers to a type of oiled leather used for goods like saddlery. The original Latigo Petroleum Inc. was an independent exploration and production company acquired by Pogo Producing Company in 2006. The current Latigo Petroleum, LLC is a privately held company that operates in the Texas Panhandle and Western Oklahoma.
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