A question...

[turbguy + 1,545]

What level of WTI crude price is typically thought of a "break even" for a driller/developer of a new crude oil source in the USA? 

I suspect that there a lot of variables, such as regs, location, techniques, transportation, and such.

Anybody here have a "feel" for this?

Edited May 13 by turbguy

[Old-Ruffneck + 1,246]

4 hours ago, turbguy said:

What level of WTI crude price is typically thought of a "break even" for a driller/developer of a new crude oil source in the USA? 

I suspect that there a lot of variables, such as regs, location, techniques, transportation, and such.

Anybody here have a "feel" for this?

WTI or West Texas Intermediate is in the Permian Basin of West Texas and South East New Mexico. The area is still active in some regions, south of Odessa, TX, and given newer tech, better geology study, probably 45-50 is close to break-even. Lots of variables! Directional drilling has increased well productions by far. Around Andrews in the early 80's we drilled straight down in proven field 12.960 feet, rig down and back to "spudding" in new hole every 8 days. I am sure today they halved that time. But differant drilling and completions today. 

[turbguy + 1,545]

16 hours ago, Old-Ruffneck said:

WTI or West Texas Intermediate is in the Permian Basin of West Texas and South East New Mexico. The area is still active in some regions, south of Odessa, TX, and given newer tech, better geology study, probably 45-50 is close to break-even. Lots of variables! Directional drilling has increased well productions by far. Around Andrews in the early 80's we drilled straight down in proven field 12.960 feet, rig down and back to "spudding" in new hole every 8 days. I am sure today they halved that time. But differant drilling and completions today. 

Thank you for the insight.  It frequently helps to converse with those having first-hand experience.

Does your experience include the cost of any follow-on costs to "get to market", such as transport?

Edited May 14 by turbguy

[Old-Ruffneck + 1,246]

7 hours ago, turbguy said:

Thank you for the insight.  It frequently helps to converse with those having first-hand experience.

Does your experience include the cost of any follow-on costs to "get to market", such as transport?

Typically it would be sent via pipeline to the Midland TX terminal.....the infrastructure is basically in place for 50 yrs now.

[footeab@yahoo.com + 2,192]

On 5/13/2024 at 8:21 PM, turbguy said:

Thank you for the insight.  It frequently helps to converse with those having first-hand experience.

Does your experience include the cost of any follow-on costs to "get to market", such as transport?

Kinder Morgan has operating expenses of ~11B-->$15Billion(2021 vrs 2022),  operating 9500 miles of pipe moving 2.4 Million barrels of product a day. 

Do the math yourself for an "average"

[TailingsPond + 1,009]

2 hours ago, footeab@yahoo.com said:

Kinder Morgan has operating expenses of ~11B-->$15Billion(2021 vrs 2022),  operating 9500 miles of pipe moving 2.4 Million barrels of product a day. 

Do the math yourself for an "average"

I love it when you say "do the math" with big ranges and rounded, wrong numbers - it's funny.

https://en.wikipedia.org/wiki/Kinder_Morgan

83,000 mi (134,000 km) of pipelines

72,000 mi (116,000 km) of natural gas pipelines

 

Edited May 19 by TailingsPond

[footeab@yahoo.com + 2,192]

1 hour ago, TailingsPond said:

I love it when you say "do the math" with big ranges and rounded, wrong numbers - it's funny.

https://en.wikipedia.org/wiki/Kinder_Morgan

83,000 mi (134,000 km) of pipelines

72,000 mi (116,000 km) of natural gas pipelines

 

SIgh... You pay feeder prices(small cost), and major TRUNK prices(big cost).  Trunk prices you must RESERVE and you pay weather you are pumping or not. 

Thus why Kinder Morgan says 9500 miles of pipe,.... your MAJOR pipes which will be the MAJORITY of your cost to market. 

Sure you can point out the thousands of miles of feeder pipes, but those are put in by the local drilling company guys and paid for by the locals and Kinder Morgan picks them up for  essentially free after the fact.