I imagine that this will change the valance in the industry from “drill at [almost] any price” to, “is there a way to do this faster, better, cheaper?”
I'd read that at the height of the boom, companies were paying premiums for the resources needed to develop new projects. They probably were most focused on making hay while the sun shone, not primarily in finding ways to further innovate and bring down costs (although I imagine that happened also - the more these companies engaged in these newer methodologies, the better they became at them, and as in other fields, they learned lots of new stuff along the way that helped them incrementally reduce costs over time).
Now, with prices low, companies have two choices: shelve projects for now and wait for prices to rebound; or devote more time, energy, and resources to figuring out how to do the work profitably at lower prices. Some projects will be shelved, but I imagine some companies will put relatively greater effort to trying to produce profitably at lower price points.
Then, as prices rise, the efforts to reduce costs will be applied more broadly to a greater range of projects, resulting in more production at lower costs, meaning that overall, the US oil industry will be more competitive than before the price drop.
sitetest
I’ve never had a client that wasn’t interested in faster, cheaper at any time, at any price.
Premiums have definitely been paid while the industry was in strong competition for labor, materials and equipment. And this means, some of the quality suffered on all of that. Price, schedule and quality. The client/buyer only gets to pick 2 of those 3.
Average prices will go down, including for the break even costs. But some of that isn’t a change, it is just shelving the more expensive side of items.
For an example, say a company has 10 areas where they were considering investing for new oil production. Break even cost for them are: 51, 53, 55, 57, 59, 61, 63, 65, 67, 69 $/bbl. Their average break even costs are $60/bbl.
If they just shelve the top 5 most expensive projects, they just lowered their break-even cost to $55/bbl. No technology change, but still lower average cost. They will just produce less until prices climb up.