January 26, 2015 – Real Money
Energy Must Hold These Levels
By: Jim Cramer
Oil's pretty much got to hold $45 where it is right now -- or else. And natural gas must stay around $3, roughly its current price, or look out below. Those are the black magic levels where our homegrown shales become uneconomic to drill for most U.S. companies. Those are the make-or-break levels for this once-thriving industry.
This morning we got some pretty amazing aggregate drilling cost numbers from RBN Energy, by far the most authoritative site for oil and gas analysis, and they were downright shocking. Right now, at these prices, almost every single important U.S. shale play is teetering on the border where it makes no sense to drill at all. It's just not worth it.
Get a load of these numbers.
Right now the Bakken in North Dakota only has a 1% return on investment vs. just last October when it had a 39% return on investment. The giant Permian shale in Texas is giving you a 3% investment on drilling, down from 40%, the Niobrara in Colorado is breakeven vs. a 37% return on investment and the Eagle Ford in Texas is -3% vs. a 24% return back in the fall of 2014...
Read the full story here: http://realmoney.thestreet.com/articles/01/26/2015/energy-must-hold-thes...
