Oil Companies Eye Crude Price Drop But Keep Drilling
HOUSTON, Sept 19 (Reuters) - A 13 percent slide in crude oil prices since June has eroded some of the allure of drilling U.S. shale resources and raised investor concerns, but companies are pushing ahead as prices are still above the breakeven levels that might prompt a slowdown.
U.S. light sweet crude traded in New York has dropped to around $93 per barrel from $107 in late June as supplies pumped from oily rocks in Texas and North Dakota grow and a strong U.S. dollar makes imports more attractive.
On Thursday, shares of Bakken operator Continental Resources Inc stumbled as much as 8 percent after the company raised its capital budget for this year by $500 million to $4.55 billion and said some well completion techniques would be costlier. The company also replaced a key executive.
But oil's price drop has not been enough to faze many in the industry, partly because companies have relentlessly worked to cut the time and the cost of sinking wells into shale and other rocks, helping salvage profits.
"Companies can now drill a well in seven or eight days when it used to take 30," said Mike Breard, analyst at Hodges Capital Management. "That can make your oil or gas a lot more profitable."
Breakeven prices to drill and transport oil range from $50 to $75 per barrel in the Eagle Ford in south Texas, $60 to $80 per barrel in North Dakota's Bakken, and $65 to $80 per barrel in the Wolfcamp Shale in Texas' Permian Basin, according to consultants at Wood Mackenzie.
"Most areas of the main plays are pretty decently placed to maintain their drilling programs," said Phani Gadde, principal analyst at Wood Mackenzie.
12
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- North America Enters Rig Loss Streak
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension