Without doubt. However, is there a price per barrel floor where the shale play becomes not profitable and production stops or slows down? I read once the floor price needed to be around $95.00 per barrel due to the cost of tech involved.
I read once the floor price needed to be around $95.00 per barrel due to the cost of tech involved.
There is not a magic number where it all stops and starts.
But the average price price where continued investment required to make the increases exceed the decreases is would be lower than that, by $15~20 bucks or more is my guess with current technology. Different fields will have different numbers for costs.
And it depends on the length of the dip in price. Majors would be more likely not to slow down drilling if they believe prices would climb back up in a short enough time. Smaller independents may have more cash flow issues. Current prices for those that bet in the futures market is trending down.
Crude Light Oil Comp. - NYMEX
http://online.wsj.com/mdc/public/page/2_3028.html?category=Energy&subcategory=Petroleum&mod=topnav_2_3012
I was at a conference in August where a consultant for the oil industry stated it was around $80/bbl