RE:RE:re: 75$ is the magicim new to this whole oil thing but your questions are pretty easy to answer
1- why drop in rigs? cause at 100$ to130$ you can drill Jupitor and sell it on earth and still make a killing.
now that the price has fallen so far the uneconomical rigs are going out of service. the ones that used to make 10 to 50 barrel a day or something like that.
The number of active rigs have fallen by something like 50% but guess what! the product still grew last month and the month before and the month before.
the operation cost includes extraction , services , maintantance , royalty and transportation, so it costs baytex on average 44$ to 46$ to extract from the producing wells and deliver to the custom before any hedge. so at 50$ WTI baytex would be making 5$ per barrel before hedge.
there are only two factors not included in the operational cost. interest/debt repayment on loans and future drillings.
positive future factors : big oil men pushing for export ban lift , this would push WTI closer to brent and brent closer to WTI , India's new budget plan , china's upbeat result that released today.
negative factors : success of iran's nuclear talk
also with the cost cutting plans the operationa cost should get closer to 40$.
3- why did BTE did secondary? cause nobody knows how low oil will go and how long it will stay. they did a secondary to survive the oi glut if oil stays at these levels and goes lower for a long period of time. also they are close to breach of contracts with the lenders and extra 550m would soften that up.
they are hoping for the best preparing for the worse.
low oil prices are hurting both OPEC and non OPEC countries. but if US decides to go into a price war with OPEC countries , the OPEC countries will get crushed.they just cant compete and out last USA if US decides to support domestic producers.
I have a feeling at some point OPEC and non OPEC countries will get together to come up with a win win solution.