Re: Biden spoke today
Posted: Fri Apr 01, 2022 2:32 am
I read something about 2020 and there were some drillers that went broke, though not as many as I’d guessed. Those oil shale wells deplete lots faster than conventional wells. I’m assuming that makes the cost per barrel at the wellhead even higher. It’s a nasty situation for smaller drillers, especially when the competition can increase production at a cost of $20 per barrel.Markk wrote: ↑Fri Apr 01, 2022 2:27 amI agree. Also most of these small outfits probably sold out and their workers are doing other things. If a company, big or small is going to start drilling, they first need the management and workers to make it happen, then they need equipment and material…and that takes time.Res Ipsa wrote: ↑Fri Apr 01, 2022 2:05 am
It’s not a question of total profits. It’s a question of whether the next well drilled can be profitable. The companies that drill aren’t all mega corporations. Some are much smaller outfits. Some of those guys got hammered in 2020 when the bottom fell out. If the war ends tomorrow and boycotts against Russia ends, where does the price go? If US drillers stick their necks out and drill to open a bunch of new shale oil wells and the price per barrel drops back down to $40 or $50, that would be a big loss. It’s pretty clear that US drillers aren’t going to drill a ton of new shale wells unless they are confident that process will stay high.