A 13% slide in crude oil prices since June has eroded some of the allure of drilling US shale resources and raised investor concerns, but companies push ahead.
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.
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