no chance shell is a buyer with all of our BG debt
More New Supplynu awlins ag said:
Let's just hope they push for higher prices instead of just producing thus decreasing prices. Read an article from CNBC where this one cat is predicting a fall back down to $42. Let's hope not for those still in the race..
Latigo said:
I'll admit I didn't read the article. But is that the price before or after paying royalties?
Latigo said:
Really, you think service companies won't raise prices?
Latigo said:
Colin, I read your article. The $35 is wellhead BEP. Throw in facilities costs at $10 - $15 across the different plays and now you're looking at $45 to $50 NOT $35.
I was more accurate without reading your article.
Well...ColinAggie said:Latigo said:
Really, you think service companies won't raise prices?
Really? Do you think they have the leverage and market conditions to raise their prices?
Latigo said:
Here is the misleading part. Unless they are letting the oil just spill on the ground at the wellhead this is how the article describes the actual break even:
"Even though the wellhead BEP is often considered the "raw" or "initial" break-even, this is not the actual break-even realized by the companies. If we include the effect of facility costs and the price discounts, we can compare the average acreage BEP across main shale plays, expressed in WTI price. In this comparison, the different zones of Eagle Ford shale (EFS) namely the East Oil zone, Dry Gas zone and Wet Gas/Condensate zone, have lower WTI BEP compared to Permian Delaware's Bone Spring/Avalon or Wolfcamp formations. Note that the differences between the WTI BEP and the wellhead BEP are play-specific and can be within the range of $10-15."
I would define actual break even as:
Wellhead $35
Facilities $10
Total. $45
The well is not economical without facilities. You can't make money if the oil never gets to market.
Goose06 said:Latigo said:
Here is the misleading part. Unless they are letting the oil just spill on the ground at the wellhead this is how the article describes the actual break even:
"Even though the wellhead BEP is often considered the "raw" or "initial" break-even, this is not the actual break-even realized by the companies. If we include the effect of facility costs and the price discounts, we can compare the average acreage BEP across main shale plays, expressed in WTI price. In this comparison, the different zones of Eagle Ford shale (EFS) namely the East Oil zone, Dry Gas zone and Wet Gas/Condensate zone, have lower WTI BEP compared to Permian Delaware's Bone Spring/Avalon or Wolfcamp formations. Note that the differences between the WTI BEP and the wellhead BEP are play-specific and can be within the range of $10-15."
I would define actual break even as:
Wellhead $35
Facilities $10
Total. $45
The well is not economical without facilities. You can't make money if the oil never gets to market.
I'm a little surprised that facilities are $10/bbl. I am somewhat familiar with the oil pipeline and terminal pricing in the eagleford and Corpus Christi and the cost to get from Gardendale to Corpus onto the water is only about $2-3 (and going down, not up) and buyers will pay LLS minus $1-2. Are you saying the cost to get it from the wellhead to gardendale is $5+?