Quote:
Originally Posted by ranchlandsselling
Thanks for asking. I wondered the same but assumed I was just out to lunch and believe there are in fact "dumb questions", so I remained silent.
|
Don't worry man. There are no dumb questions in here.
Quote:
Originally Posted by IliketoPuck
Perhaps he is referring to the inevitable snap back in service prices from contractors/drilling companies/suppliers that will occur once the price of oil recovers.
E&P companies grind the services industry into a pulp when in a down cycle and have to pay the piper as a result when things improve.
|
The service company grinding probably wouldn't affect OpEx that much. Those savings, while substantial, are realized mainly on growth projects (i.e. grinding materials suppliers, contractors, etc.). The best way to get per barrel op costs down is to keep the plant running. There's a reason Syncrude's cash costs per barrel are something like $50 compared to $30ish across the street and it has little to do with the numerator. It's all in the denominator. They couldn't keep that plant running consistently over the past couple years.