U.S. shale's message for OPEC: above $40, we are coming back

Source: Reuters

Markets | Mon Feb 29, 2016 2:28pm EST

U.S. shale's message for OPEC: above $40, we are coming back

NEW YORK | BY DEVIKA KRISHNA KUMAR

For leading U.S. shale oil producers, $40 is the new $70.

Less than a year ago major shale firms were saying they needed oil above $60 a barrel to produce more; now some say they will settle for far less in deciding whether to crank up output after the worst oil price crash in a generation.

Their latest comments highlight the industry's remarkable resilience, but also serve as a warning to rivals and traders: a retreat in U.S. oil production that would help ease global oversupply and let prices recover may prove shorter than some may have expected.

Continental Resources Inc (CLR.N), led by billionaire wildcatter Harold Hamm, is prepared to increase capital spending if U.S. crude CLc1 reaches the low- to mid-$40s range, allowing it to boost 2017 production by more than 10 percent, chief financial official John Hart said last week.

Rival Whiting Petroleum Corp (WLL.N), the biggest producer in North Dakota's Bakken formation, will stop fracking new wells by the end of March, but would "consider completing some of these wells" if oil reached $40 to $45 a barrel, Chairman and CEO Jim Volker told analysts. Less than a year ago, when the company was still in spending mode, Volker said it might deploy more rigs if U.S. crude hit $70.

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Read more: http://www.reuters.com/article/us-usa-oil-shale-idUSKCN0W20JH