Most of the U.S. oil industry is reeling. Big Shale is reloading.
As the top dogs of the shale oil industry reported earnings last week, they said they will plan to mix ambition with austerity. This year they want to chop well costs 15 to 20 percent, while raising productivity in the rock. They're already preparing game plans to raise oil output later this year, if prices justify it.
The crash in oil prices, nearly 60 percent at its March nadir, was supposed to cut off U.S. shale at the knees. Instead, it might just be putting the industry's biggest players through a financial boot camp.
"I think that's ultimately probably a good thing for the industry, and I think it probably does emerge a bit more healthy than it was prior to the downturn," said Mark Hanson, an energy analyst with Morningstar.
"I think the implication longer term is you likely see probably more cost-competitiveness," he said. "And I think that probably leads to a cap on oil prices longer term, in part just because there's so much resource that can be brought online at low prices ... once these efficiencies flow through the U.S. shale complex."Click here to continue reading this article.
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