Cartoon Courtesy PermianLandman @ Twitter
Bart had to stay after school for this "lesson."
If you believe anybody in the shale oil biz makes money below $4o, your nuts. Sorry to be blunt. And, for the record, even at $47 on the NYMEX, most oil sells below $40 after differentials and marketing costs. $40 is not enough money to pay back D&C costs in most of the wells being drilled and definitely not enough "money" to pay back the shale sectors total long term debt.
I am not joking, please: below even $50 oil prices, the entire US shale oil industry will have to produce more oil than it has already produced the past 13 years (16 billion barrels!)... just to get out of debt. Known public and estimated private debt is believed to now be $300 billion with this years splurge in Fed backed bonds.
Don't buy into the exaggerated EUR stuff; properly discounted to reflect actual realized decline, as opposed to that which was estimated years ago, the US shale oil sector does NOT have anywhere close to 16 billion barrels of proven developed reserves left in all of its basins combined. Short of $90 oil prices, sustained, it can never pay its debt back.
If your good with that, so be it.
I'm not.
