An article by Dawson on the Wall Street Journal indicates that North Dakota has been a major source of oil over the past years. Statistics put its production at 1.2 million oil barrels a day. However, lack of proper infrastructure and the need to drill deeper in these areas have made it costly. Conversely, the prices have dropped to $50 a barrel, and the owners have considered selling the fields. The wells have been idle for some years and have been considered by new investors as a fortune. The fields are on hold for prices to balance in the range of $60-$70 before drilling processes can resume.
The article can be of help to aspiring entrepreneurs wishing to practice their entrepreneurship skills in the global market. The ensuing situation demands for an investor to plan for the risks and opportunities the future may present. Financial planning is an essential component in business, for instance, the new investors in the oil wells are cutting costs by disposing some of their assets. Some of the approaches include disposing spare machinery and laying off staff, as prices are not favorable at the moment leading to dwindling revenues.
There is insufficient information on future oil prices in lieu of the current low oil prices. Conversely, various individuals and producers are purchasing the wells. If oil market prices become favorable in the future, competition will be a common aspect in the field. The new owners will need to develop strategic plans to stand out. The aspect would encourage the development of innovative ideas and new methods of operations by entrepreneurs in the industry. Tentatively, a significant improvement in the oil processing industry regarding technology and technical skills will be achieved in the long term.
References
Dawson, C. (2016, 6 7). The Epicentre of America's Oil Bust Is Drawing Buyers. Retrieved 7 17, 2016, from The Wall Street Journal: www.wsj.com/articles/the-epicenter-of-americas-oil-bust-is-drawing-buyers-1465339986
Jappelli, T., & Padula, M. (2013). Investment in financial literacy and saving decisions. Journal of Banking and Finance, 2779-2792.
