Quote from: RE on Nov 07, 2024, 09:38 PM

Quote from: TDoS on Nov 07, 2024, 07:16 PMThis one is easy. How much fracking do you think SHOULD be taking place when the net back commodity price to the producer is <$0/mcf?

That's the reason it's Good Newz.  As I said when the IEA projections came out if the oil price on the futures market dropped further (it was $75 at the time) the frackers would have to shut down production because below $70 there's little orofit in it.

The "fracker" in the article is a service company. E&Ps make the decision to drill, complete, and produce oil and gas. The fracker makes his money off providing a service, the E&P decides if it wants to drill any more wells because of a given price.

And obviously all plays have higher and lower quality geology, so even at $70/bbl, there is money to be made. Just in a more limited geographic area.

Price is then linked directly to the estimated amount of additional oil available across a given area. More price, more oil, less price, less oil, and service companies living or dying off of the activity at any given momeent along the way.

Quote from: REPrice currently is $71.80, it was briefly below $70 today and a few days ago it went below $69.

So on the chart, looks like there is some 3 billion barrels available at $68/bbl in the Eagle Ford. All US shale plays obviously have charts like this, they are hard to find though. They answer too many questions that folks would rather speculate on.

Quote from: REAll in all, the economics don't look too good for the frackers.
RE

Service companies certainly lay people off far faster than those who own and sell the oil do. Of course, they also hire far quicker when the price increases.