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If oil prices fall, fracking is too costly to be economical. http://static.cdn-seekingalpha.com/uploads/2014/10/695520_14132960335271_0.png http://static.cdn-s

by abakker 12y ago

If oil prices fall, fracking is too costly to be economical. http://static.cdn-seekingalpha.com/uploads/2014/10/695520_14132960335271_0.png http://static.cdn-seekingalpha.com/uploads/2014/10/695520_14...

protomyth 12y ago
Although low oil price seem to be stopping new wells, it looks like the existing can be profitable down to $40 (as told to me by the folks in western ND). I posted a link a while back showing the breakdown.
- Retric 12y ago
  The industry expects a large number of fracking companies to go bust if oil stays under 60$. Traditional wells are generally profitable at 1/3 that price. Worse, fracking has a lot of up-front cost in oil exploration and wells are there not useful nearly as long so expect US production to fall quickly over the next few years. The good news is at ~100-150$ it’s profitable to directly manufacture oil, but the price needs to stay there for years before companies will do the kind of investments needed to meet current demand. PS: Oddly enough, on average extracting oil and turning it into gasoline is already a net negative in terms of energy due to all the extraction, transportation, and refining costs.
  - protomyth 12y ago
    Can you point to your sourcing, I am doing a bit of comparison and I am seeing a bit of oddity in the reporting.
    - Retric 12y ago
      Which bit? http://www.cnbc.com/id/102094881 http://www.cnbc.com/id/102094881 has some numbers on regional break even prices. http://www.reuters.com/article/2015/01/08/energy-bankruptcy-idUSL1N0UN2MA20150108 http://www.reuters.com/article/2015/01/08/energy-bankruptcy-... oil bankruptcy filings also http://www.cnbc.com/id/102318531 http://www.cnbc.com/id/102318531 "$68 a barrel is not economical for a lot of these shale oil wells. http://www.cnbc.com/id/102222911 http://www.cnbc.com/id/102222911 Manufacturing oil: The new fuel is initially expected to cost around $3 to $6 per gallon, according to the U.S. Naval Research Laboratory ... “We've demonstrated the feasibility, we want to improve the process efficiency," explained Willauer. http://www.ibtimes.com/goodbye-oil-us-navy-cracks-new-renewable-energy-technology-turn-seawater-fuel-allowing-1568455 http://www.ibtimes.com/goodbye-oil-us-navy-cracks-new-renewa...
      - protomyth 12y ago
        The CNBC article jive with what I've seen $40 - $70 / $80 is the break even price for shale in ND & Texas (although one section in ND is listed at $36 from other sources). I keep seeing quotes like the second one ($70 in most cases) that quote the top of range. I'm still collecting a bit of research, but it looks like the majority of wells are closer to the bottom than the top.
InclinedPlane 12y ago
Do you not see the irony in what you just said?

by abakker 12y ago

protomyth 12y ago

Although low oil price seem to be stopping new wells, it looks like the existing can be profitable down to $40 (as told to me by the folks in western ND). I posted a link a while back showing the breakdown.

Retric 12y ago
The industry expects a large number of fracking companies to go bust if oil stays under 60$. Traditional wells are generally profitable at 1/3 that price. Worse, fracking has a lot of up-front cost in oil exploration and wells are there not useful nearly as long so expect US production to fall quickly over the next few years. The good news is at ~100-150$ it’s profitable to directly manufacture oil, but the price needs to stay there for years before companies will do the kind of investments needed to meet current demand. PS: Oddly enough, on average extracting oil and turning it into gasoline is already a net negative in terms of energy due to all the extraction, transportation, and refining costs.
- protomyth 12y ago
  Can you point to your sourcing, I am doing a bit of comparison and I am seeing a bit of oddity in the reporting.
  - Retric 12y ago
    Which bit? http://www.cnbc.com/id/102094881 http://www.cnbc.com/id/102094881 has some numbers on regional break even prices. http://www.reuters.com/article/2015/01/08/energy-bankruptcy-idUSL1N0UN2MA20150108 http://www.reuters.com/article/2015/01/08/energy-bankruptcy-... oil bankruptcy filings also http://www.cnbc.com/id/102318531 http://www.cnbc.com/id/102318531 "$68 a barrel is not economical for a lot of these shale oil wells. http://www.cnbc.com/id/102222911 http://www.cnbc.com/id/102222911 Manufacturing oil: The new fuel is initially expected to cost around $3 to $6 per gallon, according to the U.S. Naval Research Laboratory ... “We've demonstrated the feasibility, we want to improve the process efficiency," explained Willauer. http://www.ibtimes.com/goodbye-oil-us-navy-cracks-new-renewable-energy-technology-turn-seawater-fuel-allowing-1568455 http://www.ibtimes.com/goodbye-oil-us-navy-cracks-new-renewa...
    - protomyth 12y ago
      The CNBC article jive with what I've seen $40 - $70 / $80 is the break even price for shale in ND & Texas (although one section in ND is listed at $36 from other sources). I keep seeing quotes like the second one ($70 in most cases) that quote the top of range. I'm still collecting a bit of research, but it looks like the majority of wells are closer to the bottom than the top.

InclinedPlane 12y ago

Do you not see the irony in what you just said?