The average full-cycle breakeven for U.S. shale basins is approximately $54/bbl, according to Rystad Energy data.

A closer look at the data shows the median breakeven oil price for U.S. shale assets (new wells) of public E&Ps is $53/bbl WTI while for private operators, which account for approximately 37% of U.S. onshore oil production), is $58/bbl, Wells Fargo announced March 24 in a research report, citing Rystad data.

“We estimate E&P (public and private) fully loaded breakeven oil prices remain well below the strip and our downwardly adjusted oil price deck,” Wells Fargo equity analysts Roger D. Read and Hanwen Chang said in their report. “By basin, the Permian (Delaware & Midland) remain the leaders.”

Public operators on the south side of the median with the lowest breakeven price include EOG Resources ($39/bbl), Matador Resources Co. ($40/bbl) and Diamondback Energy Inc. ($43/bbl), according to data compiled by Rystad and Wells Fargo.

For the private operators, the companies with the lowest breakeven price were Providence Operating ($33/bbl), Verdun Oil Company ($35/bbl) and Gulftex Energy ($38/bbl).

Exhibit 1: US Shale Full-cycle Breakeven Oil Prices by Basin
U.S. Shale Full-cycle Breakeven Oil Prices by Basin. (Source: Rystad Energy, Wells Fargo Securities)

In terms of breakeven prices by major U.S. shale basins, the difference from one end of the spectrum to the other is $20/bbl.

The Delaware Basin offers the lowest breakeven price at $46/bbl, followed by the Midland basin at $52/bbl and DJ Niobrara at $53/bbl. The Anadarko basin is on the other extreme with a $66/bbl breakeven, which is near current spot pricing, the analysts said.

The Eagle Ford and Bakken fall in the middle of the pack with breakeven prices of $59/bbl and $60/bbl respectively.

Comments