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The Water Cooler
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Gas Prices!
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<blockquote data-quote="Shadowrider" data-source="post: 3342234" data-attributes="member: 3099"><p>At $25 oil every rig will get stacked. The rigs that are drilling now will finish up, they've already allocated the money, but afterwards they'll get stacked.</p><p></p><p>I was working a project in the Permian (the hottest area in the country) and when oil dropped to $50 they were putting on the brakes then. They had a $15 per barrel transportation cost which leaves them with a $35 net for each barrel they produce. That was a breakeven scenario. Can't fault them for that, they aren't in business to drill for philanthropic reasons.</p><p></p><p>And wells will get shut in too. Why would you keep pumping at this price when you'll never get your investment back? When you pull it out it's just gone, it's a finite amount for every well. If it's shut in, it's still there to sell when times are better.</p></blockquote><p></p>
[QUOTE="Shadowrider, post: 3342234, member: 3099"] At $25 oil every rig will get stacked. The rigs that are drilling now will finish up, they've already allocated the money, but afterwards they'll get stacked. I was working a project in the Permian (the hottest area in the country) and when oil dropped to $50 they were putting on the brakes then. They had a $15 per barrel transportation cost which leaves them with a $35 net for each barrel they produce. That was a breakeven scenario. Can't fault them for that, they aren't in business to drill for philanthropic reasons. And wells will get shut in too. Why would you keep pumping at this price when you'll never get your investment back? When you pull it out it's just gone, it's a finite amount for every well. If it's shut in, it's still there to sell when times are better. [/QUOTE]
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