The average full-cycle breakeven for U.S. shale basins is approximately $54/bbl, according to Rystad Energy data.
A closer look at the data shows the median breakeven oil price for U.S. shale assets (new wells) of public E&Ps is $53/bbl WTI while for private operators, which account for approximately 37% of U.S. onshore oil production), is $58/bbl, Wells Fargo announced March 24 in a research report, citing Rystad data.
“We estimate E&P (public and private) fully loaded breakeven oil prices remain well below the strip and our downwardly adjusted oil price deck,” Wells Fargo equity analysts Roger D. Read and Hanwen Chang said in their report. “By basin, the Permian (Delaware & Midland) remain the leaders.”
Public operators on the south side of the median with the lowest breakeven price include EOG Resources ($39/bbl), Matador Resources Co. ($40/bbl) and Diamondback Energy Inc. ($43/bbl), according to data compiled by Rystad and Wells Fargo.
For the private operators, the companies with the lowest breakeven price were Providence Operating ($33/bbl), Verdun Oil Company ($35/bbl) and Gulftex Energy ($38/bbl).
In terms of breakeven prices by major U.S. shale basins, the difference from one end of the spectrum to the other is $20/bbl.
The Delaware Basin offers the lowest breakeven price at $46/bbl, followed by the Midland basin at $52/bbl and DJ Niobrara at $53/bbl. The Anadarko basin is on the other extreme with a $66/bbl breakeven, which is near current spot pricing, the analysts said.
The Eagle Ford and Bakken fall in the middle of the pack with breakeven prices of $59/bbl and $60/bbl respectively.
Recommended Reading
The Risks and Benefits of the IRA’s 45Q, 45Z
2024-01-29 - The Inflation Reduction Act sections 45Q and 45Z are incentives to invest in energy transition and renewable energy projects, but they involve legal considerations to account for.
CEO: Linde Not Affected by Latest US Green Subsidies Package Updates
2024-02-07 - Linde CEO Sanjiv Lamba on Feb. 6 said recent updates to U.S. Inflation Reduction Act subsidies for clean energy projects will not affect the company's current projects in the United States.
Global Energy Watch: Corpus Christi Earns Designation as America's Top Energy Port
2024-02-06 - The Port of Corpus Christi began operations in 1926. Strategically located near major Texas oil and gas production, the port is now the U.S.’ largest energy export gateway, with the Permian Basin in particular a key beneficiary.
The Problem with the Pause: US LNG Trade Gets Political
2024-02-13 - Industry leaders worry that the DOE’s suspension of approvals for LNG projects will persuade global customers to seek other suppliers, wreaking havoc on energy security.
BWX Technologies Awarded $45B Contract to Manage Radioactive Cleanup
2024-03-05 - The U.S. Department of Energy’s Office of Environmental Management awarded nuclear technologies company BWX Technologies Inc. a contract worth up to $45 billion for environmental management at the Hanford Site.