There’s been a lot of talk about the price of oil lately. With WTI now below $80, we’re seeing the first shoes begin to drop among in North American oilfields, as some producers announce plans to scale back their drilling programs.
Just this week, Conoco Phillips, announced it would be cutting back drilling in West Texas’s Permian Basin, and last month, Eagle Ford-focused Clayton Williams indicated it may scale back its drilling program in the play by the first of the year.
However, lower commodities prices for crude oil aren’t likely to stop new drilling in the Eagle Ford. With breakeven oil prices between $50 – $60 per barrel, in certain liquids-rich areas of the play, operators will continue to drill, even if prices inch closer to this range.
Eagle Ford Slow Down
Should prices drop to $70 per barrel, experts believe the Eagle Ford will likely experience a slowdown, but not an all out bust. And some producers will fare better than others, depending on their position.
According to the consultancy Wood Mackenzie, the Eagle Ford is still expected to reach two-million b/d of crude and condensate production by 2020. Analysts predict the Karnes Trough, one of the best areas of the play, would be profitable, even if the price of oil fell into the $40s range.
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