GREY:LSTMF - Post by User
Comment by
PeterWrighton Oct 08, 2015 9:31pm
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Post# 24177674
RE:RE:RE:RE:RE:RE:RE:PerterWright...I totally agree with your range
RE:RE:RE:RE:RE:RE:RE:PerterWright...I totally agree with your rangeWritten by another poster. I think it's a good read
While some of the numbers stated for shale drilling cost are correct the cost of production in the most profitable plays in Eagle ford ect are closer to $35 a barrel. The high cost and low profitability wells have stopped being drilled as seen in declining rig counts, but fresh production is continuing in the best plays. The vast technical and efficiency improvements in the ten year history of shale have put it now firmly in the middle of the cost curve and as a result it will continue. They are now also the most flexible so can ramp up production in response to rising prices.
The place where production will really suffer is in the higher cost producers particularly the north sea where marginal cost of production is much higher.
Russia and Venezuela despite huge reserves, have some incredibly high cost of production to lack of investment so these areas will struggle far before the better shale plays