• U.S. companies in shale fields from North Dakota to Texas are talking tough in the face of Saudi Arabia’s price war, believing they have more staying power than many of the OPEC partners.
• “Saudi Arabia is really taking a big gamble. If they take the price down to $60-$70, you will see a slowdown in the U.S. but you’re not going to see it stop. The consequences for other OPEC countries are far more dire,” says Chesapeake Energy chairman Archie Dunham.
• Execs at several large U.S. shale producers, including CHK, EOG Resources, and Whiting Petroleum said as they reported earnings that they plan to maintain and even raise production.
• Shale producers cite success in reducing costs as proof they can still be profitable at prices below $70/bbl; CHK says well costs at its two largest production areas – Pennsylvania’s Marcellus Shale and Texas’ Eagle Ford – fell 11% and 13% respectively Y/Y during the first seven months of this year.
• But not all shale is alike: Bakken and Permian producers need prices at ~$67 and $65, respectively, to make drilling worthwhile, according to ITG Investment Research, while producers at the Cana Woodford shale in Oklahoma need $100 to make a profit, and $79 is the threshold at the Anadarko formation on the Texas-Oklahoma border.

Joseph Barone
President
ShaleDirectories.com
610.764.1232

www.shaledirectories.com