Will Low Oil Prices Slow Northeast (Indeed All) Shale Drilling?

Today seems to be oil day on MDN. Which is kind of funny–a blog/news site about shale drilling in the northeast (largely natural gas drilling) focusing on oil. However, a fair bit of condensate and light sweet crude oil is extracted in the northeast, mostly in the Utica but some of it from the Marcellus too. The reason to talk about oil, and its price, is not because of the volume of oil being produced in the northeast, but rather because many of the companies that operate in the northeast operate elsewhere and the price of oil affects their overall operations everywhere. When the price of oil dips below a certain point, it makes it unprofitable to drill and harder to get money for all operations. Below we have a couple of fascinating charts that show the breakeven price for drilling as tied to the price of oil. Presumably at, or even near, that price, companies will stop drilling for oil (and in many cases stop drilling for natural gas as well). What’s really interesting, for MDN, is that the Marcellus and Utica appear on both of these charts…

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