Posted on 02/25/2016 10:48:08 AM PST by bananaman22
Whiting Petroleum announced earnings on February 24, with probably the most bullish and shocking news to come to the oil patch since the crash started in June 2014.
It announced that it will not maintain any active rigs in the Bakken shale region in 2016 and also announced production cuts of 15-20 percent and a capital spending reduction of 80 percent.
The significance of this is that, contrary to popular belief, the so called breakeven points are not anywhere close to $30 when you take into account cap ex. That should be obvious enough, but the media and many analysts have consistently misrepresented this either due to ignorance or bias.
(Excerpt) Read more at oilprice.com ...
If the breakeven point is 30, then that explains why the OPEC nations lowered their price to $20
It is a TRADE WAR and we need to be fighting it.
Apparently the answer is NO:
“I don’t believe any of the expectations of a 2H16 economic rebound. If anything, things will decelerate further compared to the first quarter of 2016. Thus, some price recovery can be expected, but until governments around the world realize that loose monetary policy only temporarily boosts growth while making things worse by contributing to higher debt, prices can only rise so much. The real spark to prices will come when pro-growth polices get adopted.”
We manufacture a piece of an offshore oil exploration system. Reduction of orders have starved our little company for a year and we just got a RFQ for 1000 pieces this AM. Lord have Mercy, perhaps this business is coming back.
Levelling Saudi Arabia would be a good start.
I would level them last...
Iran needs a boot in its ass first
The break even price depends on the quality of the basin (Permian being better than elsewhere, for example), the operator’s rock and acreage position in said basin (core acreage in said basin), and how efficient the operator is.
There are several that can eek by in the Permian at $30.
Not many, though.
Oil would just flow to the surface then.
It’s a pressurized reservoir and relatively shallow.
I don’t know but oil in the $30 to $40 range pretty much makes solar, and wind totally useless.
Not to mention a lot of other things.
However, with all the drilling stops, I wonder how long the price will stay low.
The market price is the market price. OPEC cooked its own goose by extorting hgh prices. Those days are over, forever.
Kill their infrastructure at the least. We can roll in later and build later ourselves. We need to take out their wallets.
Natural gas is really what kills them.
Liquids are not used all that much for electrical generation outside of back-up or peak-use generation, and not even all that much there.
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