Ann: Marco Polo 1 Well Deviated Drilling Operations completed-AKK.AX, page-72

The problem with assuming that oil is going to sit at $40-$50 for the next two years is that Saudi Arabia will be bankrupt by that time.

I have previously posted a chart of oil prices and how long it would take for Saudi Arabia to bankrupt - fairly sure every one has seen it.

if oil stays at $45-50 Saudi Arabia will be bankrupt by 2019 if I remember correctly.

Iran, Russia, Venezuela and Algeria can also be added to that list.

This is where we run into problems when we assume that there wont be a snap back in the oil price to a more reasonable level in the short term.

You are partly correct in saying that Shale picks up some slack as soon as prices hit a certain threshold - however shale cannot pick up a huge amount of slack as it simply does not have the infrastructure/resources to.

I'd bet my last dollar on the belief oil will be closer to $60 within 12 months time.

Logic.