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To: Pearls Before Swine

I think you’re right, Pearls. Sustained low prices might trigger a shakeout in shale oil production, but not a collapse. Weak producers will fail while stronger producers will survive, and innovation will eventually lower shale oil production costs for all. The Saudis can try to crush American competition but increased capacity is the new reality, and the Saudis are also hurting many of their OPEC allies who are living on the economic edge.


29 posted on 11/27/2014 10:32:46 AM PST by Always A Marine
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To: Always A Marine

I do not believe the shakeout will take very long. Horizontal wells have notoriously steep initial depletion curves, and generally flatten out within two years at about 20 to 25% of their IP. It won’t take a long moratorium on drilling to see a reduction in production from the newer wells. The question is one of if that decline in production will be sufficient to get the ball rolling again on the drilling end.


77 posted on 11/27/2014 11:47:34 AM PST by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing.)
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