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AMERICAS OIL: Wildcatter Hamm Says Shale Needs $80 Oil for Costly Fields: BBG

AMERICAS OIL
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Wildcatter Hamm Says Shale Needs $80 Oil for Costly Fields: Bloomberg

  • Harold Hamm challenged a claim from the new US energy secretary that domestic oil companies could increase production even at prices as low as $50/bbl.
  • Energy Secretary Chris Wright told the Financial Times this week that while new supply will push down prices, oil companies will learn to innovate and bounce back.
  • On Thursday, Hamm warned that US drillers need $80/bbl oil to cover costs at some wells.
  • “There are a lot of fields that are getting to the point that’s real tough to keep that cost of supply down,” he said in a Bloomberg Television interview. “When you get down to that $50 oil that you talked about, then you’re below the point where you’re going to ‘drill, baby, drill.’”
  • At this week’s CERAWeek energy conference, executives for some of the largest US shale companies forecast US oil production will peak in the next three to five years.
  • Scott Sheffield, who expects US output to peak at about 14 mb/d, said in a Bloomberg Television interview this week that the oil price needed for publicly traded drillers to cover costs and turn a modest profit is in the range of $50-$55/bbl.
  • Hamm added that Trump’s import tariffs are a concern because of the steel pipe needed to line oil wells. “It’s helpful that there are some steelmakers in the US, Hamm said, “but they can’t supply it all.”
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Wildcatter Hamm Says Shale Needs $80 Oil for Costly Fields: Bloomberg

  • Harold Hamm challenged a claim from the new US energy secretary that domestic oil companies could increase production even at prices as low as $50/bbl.
  • Energy Secretary Chris Wright told the Financial Times this week that while new supply will push down prices, oil companies will learn to innovate and bounce back.
  • On Thursday, Hamm warned that US drillers need $80/bbl oil to cover costs at some wells.
  • “There are a lot of fields that are getting to the point that’s real tough to keep that cost of supply down,” he said in a Bloomberg Television interview. “When you get down to that $50 oil that you talked about, then you’re below the point where you’re going to ‘drill, baby, drill.’”
  • At this week’s CERAWeek energy conference, executives for some of the largest US shale companies forecast US oil production will peak in the next three to five years.
  • Scott Sheffield, who expects US output to peak at about 14 mb/d, said in a Bloomberg Television interview this week that the oil price needed for publicly traded drillers to cover costs and turn a modest profit is in the range of $50-$55/bbl.
  • Hamm added that Trump’s import tariffs are a concern because of the steel pipe needed to line oil wells. “It’s helpful that there are some steelmakers in the US, Hamm said, “but they can’t supply it all.”