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Producers can offset some of the rapid declines in output associated with shale drilling from existing acreage (i.e., “squeezing more barrels out of what they already drill”), said Rich Tabaka, president of Allied Resource Partners, an independent oil-and-gas company. But it can “feel like a bust because shale production falls off a cliff right away,” he said.
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According to Rystad Energy it COSTS the United States $9.00 per MMBTU to freeze natural gas into LNG, ship it, and thaw it out in Europe where it can be sold for $13.56 per MMBTU. That's a $4.56 per MMBTU margin (profit). THAT is why America is being drained of its natural gas resources, for less than 5 bucks profit,
realized mostly by the midstream and downstream sector.
Upstream, for instance in the Permian Basin, the tight oil sector is going to have drill tens of thousands of wells at $10MM each to supply the midstream/downstream sector with feedstock. Upstream E&P will have to borrow that money to drill those tens of thousands of wells and add that new debt to $185 B of existing debt the Permian Bain still holds.
Once again, America is exporting its hydrocarbon future to foreign countries, BELOW COSTS.
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The materials provided on this site are for informational and educational purposes only and are not intended to provide tax, legal, or investment advice. I may make data related mistakes occasionally; if you use my opinions about oil reserves or shale well economics for financial purposes, to buy or sell stocks, your nuts. Don't do that. If I have used a photograph incorrectly it was for educational purposes and I have done my best of to give credit where credit is due. My stories are all true, slightly embellished, perhaps, but true; I don't change names to protect the guilty. I am as accurate as possible about history and historical facts; I work very hard at that.All rights are reserved, whatever that means. Don't blame me, I didn't do it.
