Updates
Later, 6:12 p.m. CDT: a reader sent me this link with regard to the current slump in oil prices --
“We don’t really know where oil prices are heading, or how this will affect our chief competitors, OPEC and Texas, but we are in this together,” states Helms. “Not only is North Dakota under a lot of pressure, the OPEC counties are as well.”
Helms reports that today’s world oil price is $66.25 per barrel.
“Saudi Arabia needs $94 per barrel, and Iraq $116, to satisfy their current government budget,” states Helms. “So they are below break-even in terms of world oil prices.”
The only oil-producing country that is still faring well is Kuwait, which requires $59 per barrel.
The good news is that, as far as North Dakota and McKenzie County are concerned, McKenzie County’s break-even point is $28 per barrel, which is the lowest break-even point of all the oil-producing counties in North Dakota.
McKenzie County also has the highest number of drilling rigs at 66 out of 190.
Original Post
The story:$75 dollars a barrel – that’s the price crude oil would have to hit for frackers in North Dakota’s Bakken fields to feel pressure to slow new production, according to Greg Zuckerman, author of “The Frackers” and a special reporter at the Wall Street Journal.
“All these guys have hedged. They’ve got production [and] they’ve already got the acreage. They’re not gonna stop but maybe they’ll kind of slow new stuff.”
Fracking in other parts of the country, though, is likely to be much more resilient.
In Texas’s Eagle Ford and Permian basin, Zuckerman says oil prices would have to drop as low as $60 a barrel for production to be impacted.
Which is to say – don’t think the free fall in oil prices this year will jeopardize the fracking revolution.
“There’s a challenge, [frackers are] going to make less money; you’ll see a slowdown in production. But the revolution’s going to continue,” said Zucerman.
“I would argue that we’re only in sort of, maybe, the third inning even of a long, impressive revolution. And so this will slow things down but I don’t think it’s going to stop the revolution.”
My copy of The Frackers is across the room; reading slowly to enjoy it. A reader sent me a copy. Much appreciated.
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The Market
This is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here or what you think you may have read here. Do not change any travel plans based on what you read here.
At new 52-week highs: AAPL, AEP, CAH, EW, SRE, TSO, UNP, UPS.
