Quote:
Originally Posted by taco.vidal
With heavy oil and bitumen there is talk that some producers are getting less than $10 us per barrel in Alberta. That is nowhere close to break even price levels.
Here is an article about the US patch. This may not be far off in Alberta.
http://www.bloomberg.com/news/articl...s-than-nothing |
$10 Canadian for bitumen is break even for the lowest cost SAGD producers as it essentially excludes the silent addition. So if you are getting 8.50 U.S. For bitumen a company like MEG is still above break even as op cost is only $9.10 cad.
http://www.megenergy.com/sites/defau...5%20Report.pdf
Cenovous is like $8.
The interesting thing about the Alberta Industry as opposed to US shale is that while the initial capital intensity is very high the op costs are actually relatively low and the penalties for shut in high. Compared to shale which requires ongoing capital reinvestment of oil produced by the previous well to keep going. This means that shale should blink first in terms of production cuts.