Quote:
Originally Posted by bizaro86
If this helps the differential as much as it seems to have done today, I could see small producers increasing drilling. A conventional producer almost certainly has a natural decline >10%, so even a bigger conventional producer should have scope to add production. If the price received for that production is much better, extra drilling makes sense.
It'll be interesting to see how companies do their drop. Do they shut a whole asset in, or just slow down all the pumps...
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I was thinking more on this today and I think the biggest losses with be from the integrated companies who would have been planning to expand production in the first half of the year despite the poor diff. They now can't expand that production so won't drill to expand production next year.
Even with the higher cash flows the integrateds will be better off using that cash for something other than drilling to increase production. That could have a negative affect on drilling beyond what would have been planned in 2019 capital budgets.