>But everyone knows that US shale will be back when the price rises . Interesting times.....
I think almost certainly not in the short or medium term. While BHP and a few big producers hold some acres, the bulk of the shale production has been from 2nd tier or smaller producers, and they are defaulting on their debts or frantically capital raising. Many of these barely made money at $100 oil, so the chance of debt being available in future to support new shale drilling seems fanciful. In my opinion it will take several years of oil back at high prices before the debt markets will consider smaller shale companies. And even then they will have a higher risk profile with the possibility of a repeat of an OPEC production flood.
My guess is US shale will never again hit the production levels it did last year, as natural depletion is high and the best wells have already been drilled. The result will be a longer term push for new exploration, particularly off-shore, and particularly in low political risk areas, bit of which point to good times for MMA
MRM Price at posting:
38.5¢ Sentiment: Buy Disclosure: Held
