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    Originally posted by bdog14 View Post
    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!!!
    As stated above, the play is not equal in all areas or with all operators. Operators in the "sweet spot" claiming 500MBOE EUR's have the better chance of maintaining new drilling operations and from what I've seen, those EUR's may not be too far from reality. I'm seeing 200-300MBOE in just the first 2 years on some. Even at $48/bbl a lot of those wells will pay out in 6 months. As for the leasing monies, they have already been spent so that cost doesn't affect future drilling. Operators like EOG in Gonzales and Karnes counties have their D&C below $6M now and infill drilling will be even cheaper with production equipment and pipelines to sales/gathering already in place. Unfortunately for the industry as a whole, not all wells will be economic at the current price.

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      Originally posted by kyle1974 View Post
      this 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.
      There are always huge variations in the cost, but I assure you that the break even price is dropping as the service companies are dropping prices fast.....hang on for the ride!

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        My company laid off 500 yesterday. I was one of them.

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          Big winter storm moving into the NE. This may help NG prices.

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            Originally posted by TexasBear View Post
            My company laid off 500 yesterday. I was one of them.
            That just sucks texasbear. Hope you are able to pick up work pretty quick.

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              Originally posted by TexasBear View Post
              My company laid off 500 yesterday. I was one of them.
              Sorry to hear of your misfortune. Prayers up for you and your family.

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                NBC nightly news just said the falling oil prices are starting to damage the US economy. Where are the guys on here that said it would only help?

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                  Originally posted by oktx View Post
                  NBC nightly news just said the falling oil prices are starting to damage the US economy. Where are the guys on here that said it would only help?
                  you believe everything you here on NBC nightly news?

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                    Originally posted by TexasBear View Post
                    My company laid off 500 yesterday. I was one of them.
                    Prayers to you and your family

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                      Originally posted by willwork04 View Post
                      That could happen, but I personally don't see it. There is a huge glut of natural gas right now. But who knows! I definitely hope you are right....






                      Originally posted by oktx View Post
                      Big winter storm moving into the NE. This may help NG prices.
                      We do have a lot of natural gas, but...as companies hault production of oil then the gas ng prices should rise. We just started winter that so far hasn't been very warm. It may take a few months but we will start eating up our reserves.
                      Our ng has been a by product of the oil we produce. When we slow production of oil we also slow production of ng therefore the price should go up. Oil companies will start drilling again because all of the sudden oil becomes by product of ng and the cost of oil production is offset by the ng prices.

                      I read an article yesterday saying that our larger companies like eog and anadarko have hedged their funds anticipating opecs move to dump oil on the market. They are prepared for the long-term oil prices to stay low. If that's the case we will suffer short term but ng prices will soon rise. Opec has no position on ng that they can dump a billion mcf ng to drive prices down so I believe we have the upper hand. Basically our larger oil companies are calling opec's bluff because they prepared themselves for this.
                      Jmo!

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                        Originally posted by bdog14 View Post
                        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!!!
                        Finally some numbers and cents. Risk isn't worth the reward. I need to study the balance sheets of banks with a lot of exposure to oil production. Seemingly safe debt is going to turn to junk bond status. I'm sure most of the money has already been made on that trade (shorting bonds and stocks of companies with a lot of exposure to oil and gas debt) but I'm sure there still some money on the table.
                        Last edited by JMalin; 01-06-2015, 06:16 PM.

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                          Originally posted by TexasBear View Post
                          My company laid off 500 yesterday. I was one of them.
                          Dangit man! Hope you find something soon

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                            Originally posted by duckmanep View Post
                            you believe everything you here on NBC nightly news?
                            No it's all a web of lies. I guess the market tanking is also a lie? Oh, if you are going to pop off learn to use the correct word to use. It hear not here. Smh
                            Last edited by oktx; 01-06-2015, 06:53 PM.

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                              Originally posted by jpowledge View Post
                              I've been seeing lots of work over rigs in older wells which is typical during slow downs.
                              that's why it's good to be in production right now. I know still ain't 100%safe but it helps to ease the mind a lil bit

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                                Originally posted by txoutdoorsman24 View Post
                                that's why it's good to be in production right now. I know still ain't 100%safe but it helps to ease the mind a lil bit

                                I'm in refining and to my surprise, we can't sell gasoline. Diesel is moving at the dock, but our gasoline tanks are filling up.

                                Does look like a good secure future though. We don't rely on oil price near as much.

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