Proving 'Em Wrong: How The U.S. Oil And Gas Industry Survived

Oilprice.com ^ | 31-08-2016 | Stuart

[bananaman22]

The Saudis counted them out. So did the Russians, even many domestic analysts said North American shale and tight oil and gas production would decline in the face of low prices and that investment would dry up and output would fall.

Well, guess what? They have all been proven wrong. Sure, rig counts have dropped and there have been painful layoffs of workers, but the industry is surviving and against all the “experts” advice, production of natural gas from the Marcellus and Utica shales of the U.S. Northeast is averaging 22.63 billion cubic feet per day in August,

[sparklite2]

Frackin’ A!

[arthurus]

Permian Basin in west Texas need $39, creating opportunities for new investment to come into the industry if prices can show a sustained yet modest uplift from existing levels.

This is what I thought (and said) would happen when oil first came back down to the $60s It is the history of the free market. If the price never sees $60 again the cost of production will continue to decline and more investment will be made- more oil and gas will be produced. That is terrible for the Sauds because their cost of production is already very low and they cannot gain much by new efficiencies. If the oil price does go back up to 70 or 80 it will stimulate much much more production in the USA and the price will not stay that high terribly long.

Incidentally- Mexico needs for the USA to invade and take over PEMEX to hand it over to US Oilcos. There is still a tremendous lot of oil down there and Mexican corruption and inefficiency prevents it being exploited. Same with Venezuela.

[Sicvee]

I used to think invading Mexico and taking over would be hugely beneficial to the Mexican populace because we would establish the rule of law. Unfortunately we no longer have the rule of law in our own country, so other than technology and efficiency, we have nothing to offer the Mexicans.