My best friend works as an accountant for an oil and gas firm. If economist believe that there is a detailed understanding of what price point the ROI fails per well, they are seriously mistaken.
No doubt that there are controls in place to keep the company financially viable, but the idea that they understand the detailed costs per well is a mistake.
The Saudis have long been overproducing to deliberately undermine U.S. domestic producers.
What happens when the now-empowered Iranian regime starts exporting their oil with the same intent?
Thanks a lot, Bammie!
Mostly true. On large projects I worked on I can tell you with certainty that going in they know as much about gearing of the project and risk to price, cost, production and reserves as they can with all sorts of contingency in the numbers.
Once the trigger is pulled on a large project they monitor but just keep going... they have no choice really once the trigger is pulled.
On a well by well basis it is much the same. I did the same thing for small wells and small companies that I’ve done for mega-projects. I can’t say that about many others... in the small oil company game it is not so sophisticated.