Permian and AXL best netbackAxl has a netback of $46 at Brent $85:
The average full-cycle breakeven for U.S. shale basins is now approximately $54/bbl, while the average for public E&Ps and private operators is $53/bbl and $58/bbl, respectively.....Rystad Energy data. A closer look at the data shows the median breakeven oil price for U.S. shale assets (new wells) of public E&Ps is $53/bbl WTI while for private operators, which account for approximately 37% of U.S. onshore oil production), is $58/bbl. hTTps://www.hartenergy.com/sites/default/files/inline-images/us%20shale%20breakevens%20by%20basins%20rystad%20wells%20fargo.jpeg In terms of breakeven prices by major U.S. shale basins, the difference from one end of the spectrum to the other is $20/bbl. The Delaware Basin (Permian) offers the lowest breakeven price at $46/bbl, followed by the Midland basin at $52/bbl and DJ Niobrara at $53/bbl. The Anadarko basin is on the other extreme with a $66/bbl breakeven, which is near current spot pricing. The Eagle Ford and Bakken fall in the middle of the pack with breakeven prices of $59/bbl and $60/bbl respectively. U.S. shale drillers continue to deal with the massive inflation of the past two years in costs for steel and other critical materials for their operations, along with continuing supply chain disruptions. The higher costs and delays have had the impact of raising break-even prices for drilling new wells, which in turn is leading to a scaling-down of drilling budgets as marginal prospects become non-economic. The number of active drill rigs has dropped fro the last 6 weeks, falling by 51 rigs. And is down by 11% this year. The number of active rigs has dropped by 64% since its peak, falling from 1,931 rigs to 695. Most of the larger shale producers went through the process of deciding their 2nd half 2023 capital and drilling budgets during April and May, when oil and natural gas prices hovered in the same low range we see today. These budgets, which kick in on July 1, are almost certain to be lower than the 1st half 2023 budgets, which were determined last October/November when oil prices were considerably higher. The U.S. shale industry is slowing down, and a plateauing during the rest of 2023 and well into 2024 seems more likely at $70 WTI, than the fanciful growth being pedalled by the Biden regime.