Hughes quoted in CNBC article on looming threat to American oil
February 12, 2015
Post Carbon Fellow, and author of PCI’s Drilling Deeper reort, David Hughes was quoted in this article at CNBC on the looming threat to American oil output.
From the article:
…However, they’ve already drilled many of the most economic wells. Currently, exploration and production companies are “high-grading,” or moving rigs from marginal parts of their portfolios to areas with more economical wells.
In the medium term, they will have to start drilling the less economical wells, Hughes said. That means their break-even prices will only get higher over time.
“The wells don’t get any cheaper when you drill in a poor location,” Hughes said. “As the sweet spots become saturated, the amount of money you have to spend to keep the production rate flat goes up.”