Originally posted by hammer63
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Hey Oilfield Guys!!
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Originally posted by kyle1974 View PostThat's just break even. If it were me, I wouldn't throw the money out there to make $5 a barrel anyway. The eagle ford has a much lower break even than many plays in west texas or the bakken.
The other thing is, those are current break evens. As prices for services go down, the break even goes down.
I do agree that what we'll see is mainly lease holding drilling though. People aren't going to spend the money to barely break even.
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Originally posted by JMalin View PostBeen quoted as low as $40 in the eagle ford. This was from a company man for EOG.
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Originally posted by Skinny View PostWhen y'all say break even...do you know how many bbls of oil these newly drilled wells are making per day or are you just guessing?
And what type of break even time frame are you putting on these wells???
some wells have a 6500 ft TVD, other wells have an 11,000' TVD... some are two strings of casing, some are three... There is one company out here that has had their acreage long before the eagle ford ever kicked off, and their break even is probably around $35, but does that mean they want to sell it for that, when it will likely come back down the road?
lots of questions and lot of speculation right now...Last edited by kyle1974; 01-06-2015, 03:40 PM.
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Originally posted by DXTroughneck View PostIts getting real ugly and quick on the drilling end. Companies that claimed to be holding out till the spring to see what is going to happen are now laying rigs down. I sure wish i could find a job on the production side and wash my hands of this drilling end!
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Originally posted by kyle1974 View Postthis is the one I was going off, but I was wrong on what I posted... gives a range for the plays. When I first saw this back in November, I remember thinking... "there's still a long way it has to fall"... and now we're lower than that.
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Back of the napkin calculations:
COSTS: Leasing @ $1000/ac and spending $7.5mm per well = $7.6mm per well -based on 100 acre spacings.
REVENUE: If the estimated ultimate recovery of 300k bbl/well @ $48 oil = $14.4 mm revenue per well
LESS: 25% to royalty owners = $10.8mm per well
LESS: Original costs of $7.6mm = $3.2mm over the well's entire life
This leaves very little margin for error/dry holes/mechanical/title issues. Not to mention you have to factor in the time value of money after the flush production period slows down.
Basically, it doesn't work at this price.
Who knows how long this game of chicken goes on for...we need some good ol' fashioned collusion!!!
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Originally posted by willwork04 View PostYep, ours are both fairly similar. Bottomline -- the industry is going to slow down to a glacial pace if oil remains below $50/bbl for an extended period of time.
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Originally posted by jpowledge View PostMaybe?? Traditionally when oil prices drop then natural gas prices rise. Natural gas was at 2.88 this morning but if it starts climbing back to that $7 to $8 range then drilling will pick up for gas.
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Originally posted by hammer63 View PostWith the slowdown in new wells and frac crews with nothing to do, you may even see an overall effort to re-frac some wells. It has been done with good returns in production, according to my sources.
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