breakeven (1)

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Breakeven Price On Oil

It's been bandied about a great deal lately so I thought I would post these graphics from CNBC to make things simpler to understand.  Clearly some drilling projects require higher prices to remain profitable while others, maybe not so much.  To explain a little on the price spreads, it all comes down to "when" each project was established where older ones may be require updating technology speaking and higher maintenance costs where newer ones are utilizing higher-tech equipment and can operate at a lower price on oil to break even.   Cost is also affected by how deep they have to drill to reach oil and how many barrels per day it puts out versus how much you invested in the well.  Clearly Saudi Arabia has the advantage but as they do, they drain their cash reserves (as does everyone else).

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