Ping.
we need to subsidize them.
This isn’t really news... it was a planned action by OPEC to shut down the US oil patch. Presently the pendulum will swing the other way, and we’ll be booming again.
The Saudis were open about their intent to neutralize the threat to OPEC from the fracking of U.S. oil shale. They said they would do whatever it took to keep the price of oil low enough to kill off the economic incentive.
this article misses out in several areas as it concludes all deferred completions are due to cash flow.
Not true.
A lot of completions are deferred due to suppliers’s not reducing costs. Also, there is a lot of synergy when multiple completions are made to optimize costs and to ensure frac complexity is maximized.
We are also witnessing some practical aspects related to completion deferral::
1. no ad valorem taxes are collected as there are no reserves until completion occurs.
2. some operators are betting that oil prices will increase in the future when completion costs have lowered, thereby raising profits.