Price of oil

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12345plainsman
Posts: 8
Joined: Mon Feb 28, 2022 11:30 pm

Price of oil

Post by 12345plainsman »

If in some way the price of oil was pushed back to 60 dollars a barrel would all sweet 16 companies remain profitable?
Fraser921
Posts: 2955
Joined: Mon Mar 22, 2021 11:48 am

Re: Price of oil

Post by Fraser921 »

I'd say yes. You can model it by downloading Dan''s models

I think they are all profitable down to 40-45
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: Price of oil

Post by dan_s »

Yes, all of the Sweet 16 would all be profitable with oil at $60/bbl. They all survived and extended period of $40 oil and their balance sheets are in much better shape today than they were at the beginning of the pandemic.

Keep in mind that except for CRK, which is close a pure natural gas company, all of the Sweet 16 produce and sell a combination of oil, natural gas and NGLs. Oil prices are set by the global market, which is clearly under-supplied. Natural gas and to a lesser extent NGL prices are set by regional supply/demand.

There has been a "Structural Change" in the U.S. natural gas market with the surge in demand for LNG. The propane market is also extremely tight. All space heating fuel inventories are too tight for this time of year.
Dan Steffens
Energy Prospectus Group
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