Big Jump!

[Fisherman25]

I don't doubt that a bit but what is it based on ?

Doesn't have to be based on any more than that. All it has to do is excite the market and up it goes.

 

[eyexer]

cost of a well in the Bakken has taken a serious drop. Was 9-9.5 million now it's around 6 million. The biggest reduction is coming from greatly reduced fracing costs. And due to the reduction in fracing costs, they are able to double and close to triple the amount of popent they are putting down which is increasing the IBOP by about 50%. So it's not all doom and gloom. But most companies will be reducing rig counts more before december. They have to reduce costs on the front end. Simple math. But production won't decline near as much as originally thought due to the increases in IBOP

 

[johnr]

I don't really have a dog in this fight, but I do have many friends that are effected. They have already been feeling this coming for about 6 months now. Reduced hours, reduced pay, different shifts, etc.
When a guy gets used to making a certain dollar amount, then has that reduced by 25-50% it changes your entire lifestyle. Most of my friends have been in the industry long enough to know to put cash aside, a rainy day fund. Some of these guys (younger, newer to the bus) did not, and they are going to be in a bit of financial difficulty.

I like cheap gas/diesel, but I guess I like my friends better.(sometimes) haha

 

[NodakBuckeye]

cost of a well in the Bakken has taken a serious drop. Was 9-9.5 million now it's around 6 million. The biggest reduction is coming from greatly reduced fracing costs. And due to the reduction in fracing costs, they are able to double and close to triple the amount of popent they are putting down which is increasing the IBOP by about 50%. So it's not all doom and gloom. But most companies will be reducing rig counts more before december. They have to reduce costs on the front end. Simple math. But production won't decline near as much as originally thought due to the increases in IBOP

Yup, but what percent of wells done this year where enhanced fracs? Wells being drilled now will be that way but I don't see enough drilled over the next 12 months to offset declines on existing wells. The Saudi's want that so they can have more volume but will prices stay in the range to reduce competion but still enough to keep their economy intact? Until we see the global economy tick up and demand for crude go up, we will probably be in the 40-60 range. The longer drilling stays at reduced rates, the greater the chance of a fast and overshooting price climb because of the lag in getting projects up and rolling again, not just here but just about anywhere but the Middle East.

- - - Updated - - -

I also find all the talk about how high the U.S. oil inventory is interesting and I agree that the supply is too high but we only have about a 23 day supply of oil on hand. 450 million bbls last week and average daily consumption of 19.5 million. The U.S. inventory would supply the world needs for less than 5 days. A couple hiccups in the gobal supply chain and things can turn in a hurry.

 

[Davy Crockett]

Another bad thing for North Dakota is that we are the geographical center of North America , shipping by rail might make sense at $ 100 Bbl Oil but it doesn't at $ 40
Saudis bought and paid for their oilfield infrastructure many years ago , They can thrive on $ 40 Per Bbl. I wish it wasn't this way but it is.


http://info.drillinginfo.com/saudi-arabia-oil-need-know/


"Saudi Arabia has supergiant oil reserves that are easy to tap, they have the necessary infrastructure in place to stabilize, transport and refine large volumes of crude, and easy export access to the east and the west".