Shale Drillers To Lose At Sub-$50 Oil

30 Sep 2017   Prices, Shale Oil

Shale oil and gas producers need WTI prices at least US$50 oil to be able to see significant returns, analysts from Moody’s said in a research note today. For natural gas, the minimum price level to ensure reasonable profitability is US$3 per MMBtu, the analysts said. The team studied the capital efficiency indicators of 37 shale drillers, focusing on operating cash margins and the costs associated with finding and developing oil and gas resources. Over the first eight months of the year, WTI averaged US$49.34 a barrel, while the Henry Hub price per MMBtu of natural gas was US$3. Even though WTI prices are now above US$50 a barrel, the latest price forecast from the Energy Department sees the average for this year at US$48.83 and the average for 2018 at US$49.58. While the Moody’s analysts acknowledged the progress that shale oil and gas producers have made in reducing […]

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