Oil Tops $100 Per Barrel

Oil prices hit a record high. And, drivers everywhere are cringing. The price for a barrel of crude hit $100 for the first time in history on Wednesday. And then, went just slightly past $100 again on Thursday. But, there is a silver lining. The News On 6's Steve Berg reports the news may mean higher prices for consumers, but it's good news for Oklahoma oil producers.

Especially those operating low-producing wells, which in the past were not worth operating, but now they are. For example, there is a well that was first drilled near Owasso almost a century ago and it's still chugging along, although now it's only producing a few barrels a day.

"These are what we call stripper wells. They range from a barrel to two barrels. Some of the better wells might be eight to 10 barrels," said oil producer George Sallee.

George Sallee says, for a lot of years, the stripper wells or marginal wells, couldn't even generate enough money to pay for the electricity it would take to run them. But, when the price per barrel got into the $60 or $70 range, these wells, eking out just a few barrels a day, are actually profitable.

"Oh yeah, it's made a lot of these leases profitable. In fact, we've had some properties that we've reactivated," said oil producer George Sallee.

Sallee says it's not a huge profit because it often takes expensive chemicals and other techniques to get the oil out. And, he's quick to add that he's not immune to gas prices either.

"The unfortunate part about it is, as the price of oil goes up on the marketplace, so does all the services we need to utilize," said oil producer George Sallee. "Everything we use out here in the field is either burning diesel or gasoline."

But, he says everyone benefits, whether it be oil drilling or oil services, and the ripple effect will be felt throughout the economy. But, if you're only filling up your car, Sallee says don't worry, with his 50 years of experience, he feels confident about one thing.

"The $100 a barrel oil, I'd be very surprised if that lasted very long."

It's probably not much comfort, but according to some estimates, the price of oil, when adjusted for inflation is still a bit lower than it was in the 1980s. Also, economists say we're paying a smaller percentage of our income for energy than we did back then.