US E&Ps Can Turn A Profit On $50 to $60 Oil, Barclays Finds

27 Apr 2017   Shale Oil

Declining development costs and capital efficiency improvements position US E&P companies to earn solid returns at $50 to $60 per barrel oil prices, says Barclays’ report. Sharp declines in development costs and advancements in capital efficiency means exploration and production companies (E&Ps) can turn a solid profit even if oil remains in the $50 to $60 per barrel range, according to Barclays’ analysis of year-end 2016 annual reports. In fact, Barclays is projecting that within that range, the industry can deliver average recycle ratios (per-barrel profit divided by the cost of discovering and extracting the product) close to 145 percent, grow reserves and production at a consistent 7 percent rate and keep balance sheets in shape. Last year, drill-bit finding and development costs dropped 30 percent from 2015 and 50 percent from 2015, Barclays said in an April 26 equity research report. Permian and Appalachian players have typically been […]

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