Osage Exploration and Development Inc (OEDVQ)

[pineyhill]

Also, would it make sense for Saudi to economically go to war with arguably their biggest ally and inarguably the biggest pool of demand pull for their only commodity and the basis of their entire economic and political system? Additionally, Saudi Arabia has openly commented on the fact that they are willing and able to withstand low oil prices for up to a year. If you flip that around it means that they are only able to withstand low oil prices for a year, a much shorter duration than the vast majority of shale producers in the United States, many of whom are well hedged for the next year and have capital spending flexibility.

Where are U.S. Shale plays on the cost curve compared to OPEC and Non-OPEC Producers?

To examine this it is critical to note that in assessing country level cost curves, we are baking in governmental spending and budgets into their cost to produce whereas private enterprise in the United States bakes has no such burden above the tax and royalty rates built into their business models. While estimates vary on each country or play's economic break even I have chosen more conservative shale assumptions and generous country assumptions to prove the point that even with this methodology, shale basins in the United States are more cost competitive than governmentally burdened country level production. Here is a sampling of oil price thresholds generally held to be needed for OPEC national budgets to be balanced: Libya $184, Iran $131, Algeria $131, Nigeria $123, Venezuela $118, Saudi Arabia $104, Iraq $101, UAE $81, Kuwait $78, Qatar $77 (Source: Deutsche Bank and IMF).

http://seekingalpha.com/article/2759495-what-is-saudi-arabia-thinking