The Permian Basin: update on economic reality

摘要

The Permian's core counties produce a median breakeven below $40/bbl for the top 25% of wells drilled. Over the course of the last six years or so, U.S. shale has drastically changed the landscape of how supply meets demand and what those dynamics must be to achieve global market equilibrium. When prices increased so dramatically in 2011, there was a rush to begin drilling and entering into domestic shale plays, where operators focused on optimizing drilling techniques and establishing a large inventory of wells. Despite the development rush, there was still a global factor that needed to be monitored and maintained, which is the global supply and demand balance. The increased production from onshore shale combined with other lucrative supply sources, as well as the recovering global economy, all worked to widen the gap between the world's supply and its consumption needs.