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To: thackney
$40 is not a break even point. It is a point so low with today expensive production that we would surely have large layoffs in the industry and idle rigs setting around.

I misunderstood why you referenced that particular price. My memory was that $40 had been a historic high prior to Katrina.

59 posted on 03/07/2012 1:55:13 PM PST by OHelix
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To: OHelix
I picked $40 because it was a recent price we dipped below and had significant layoffs even though the price did not stay there long at all. The slow down in the industry started at much higher prices and was brutal by that point.

Look at this chart for comparison.

Link because WTRG.com doesn't like hot linking:
http://wtrg.com/rigs_graphs/rigus.gif

Keep in mind with the linked chart, that the slow down was My memory was that $40 had been a historic high prior to Katrina.

Katrina was in late August 2005. We had been above $40 a barrel for crude oil for over a year by that point.


(click pic for data set)

60 posted on 03/07/2012 2:33:09 PM PST by thackney (life is fragile, handle with prayer)
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To: OHelix
Sorry, I hit send before I finished editing

Keep in mind with the linked chart, that the slow down was

the slow down started before the drill rigs started to idle. Projects were put on hold, equipment orders were canceled, engineering/design laid off. Rigs at that point were on extended contracts to keep from loosing them. Mid 2008 it was getting tough to get a rig for just a couple holes. Companies had to make longer commitments.

61 posted on 03/07/2012 2:41:10 PM PST by thackney (life is fragile, handle with prayer)
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