Incitec Pivot Ltd T.IPL

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[blade86ca]

yea sure its much cheaper to setup a rig now  but the revenue generated now will be approx. less than half of what it was a year and a half ago , the cost of rigs and supplies moves in lock step with price of oil. It is all relative. This is what banks will be looking for, what the companies debt to cash flow will be.

If the cost of capex has come down so much as you say , why are so many companies out there cutting capex left right and center instead of expanding capex and drilling more ?.I am talking about the non-leveraged or very slightly leveraged companies

Companies were also very leveraged when oil was at 100$ wti but because they were generating plenty of cash at the time it was not too much of an issue for most of them to keep drilling. For a brand new company to step into the oil and gas game now they would still need to borrow. I have read on google that for shale drillers it costs them approx. 10$ wti to just maintain and just keep pumping existing well there were already drilled but it costs them atleast $40 wti to drill a bran new well from scratch. the $40 wti maybe a bit lower now but it can't possibly go much lower as these oil workers and oil suppliers don't work on minimum wage.