National Energy Services Inc. (fka NESV)

[stocksmarter]

U.S. now becoming new World leader in Oil Supply Chain

One of the first ways to cut costs is to shut down exploratory operations and shift equipment to lower-cost production. The falling price of energy, meanwhile, obviously hurts revenue, but it also saves money on the back end, since fracking tends to require lots of diesel fuel. Drilling firms are also renegotiating contracts with insurers, oil-services companies and other vendors, driving down those costs. And they’re focusing more on technology breakthroughs that could push costs even lower.


But it now seems the much-anticipated fracking meltdown — which would certainly please the Saudis and other OPEC members — may never happen. “As prices dropped, there were quite a few smaller companies that many people thought would just fall over and die,” says Rice of Wood Mackenzie. “That has just not been the case.” Most drillers that need financing have been able to get it. The ability to slash costs is one reason lenders have doubled down on many companies.

The oil bust, meanwhile, is making U.S. drillers more competitive. Cutting costs by 30% lowers the break-even price for a driller by about $15 per barrel. Many drillers can now break even with prices for West Texas crude below $60 a barrel , and some can do so below $50. Those break-even points will continue to come down as long as prices remain low, keeping the pressure on.

http://finance.yahoo.com/news/how-american-frackers-plan-to-beat-opec-143601751.html