07-03-2016, 10:54 AM
(07-03-2016, 07:29 AM)BlueKelah Wrote: I do not know how shale is profitable at 40+ or even breakeven just looks that way from some articles I have read, but could be rough estimate by analysts.
Sometimes I see analysis that I cannot help but make a comment.
Let's see the following articles:
EOG can make $30 oil work
EOG cuts capex by 50% after big loss
EOG is one of the better E&Ps in America. They still made a loss of $4.5 billion in 2015 and they have announced that their capex will be reduced by 45% to 50% for FY2016. At the same time, they also claimed that they can make a return of 10% at $30 oil with a 10-year drilling inventory.
I would put more weight on the fact that they are cutting capex by 50% than the claim that they can be profitable at $30 oil. Would you?