The sudden meltdown in prices – oil fell nearly 8 percent on Tuesday – could put renewed scrutiny on the point at which many shale wells breakeven.
The problem for a lot of companies is that they are not necessarily earning the full WTI price. Oil in West Texas in the Permian Basin continues to trade at a steep discount relative to WTI, even as the differential has narrowed in recent months. With WTI at roughly $47 or $48 per barrel, oil based in Midland is trading below $40 per barrel, the lowest point in more than two years, according to Bloomberg.
Bloomberg NEF data provides more clues into the complex “breakeven” debate. Wells located in the Spraberry (within the Permian basin) can breakeven when prices trade between $32 and $47 per barrel. Digging deeper, Bloomberg NEF notes that some of the best wells can break even in the low $30s, but the worst quartile of wells breakeven at an average of $65.54 per barrel.
In other words, a large portion of wells in the Permian – which, to be clear, is often held up as the best shale basin in the world – is currently unprofitable, given WTI priced in the high-$40s per barrel. The problem is even worse for areas outside of the Permian, where breakevens are on average much higher. Arguably only the very best wells in the Bakken, the Eagle Ford and the Niobrara are making money right now.
That puts the heady production figures from the EIA for 2019 into doubt. The agency expects the U.S. to grow production by 1.2 million barrels per day (mb/d) in 2019, another very large annual increase. However, that growth is predicated on higher oil prices. “If WTI remains around current levels (~$50/bbl), US growth should start to slow,” Morgan Stanley analysts wrote in a recent note.
https://oilprice.com/Energy/Crude-Oil/Shale-Growth-Could-Slow-On-Oil-Price-Meltdown.html?utm_source=tw&utm_medium=tw_repost
使用大量沙和水的SHALE OIL
会有什么后果呢？？
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