ERHC Energy Inc (ERHE)

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For anyone thinking oil prices will quickly recover, the Saudi's seem to have a different plan in mind. Not boding well for shale producers or for new, expensive deep water exploration. And while a deal with Kosmos or Total might some day be finalized, only a fool would believe it will be for $100 million or more imo.

The new Saudi policy suggests that sustained lower prices will help them maintain, and with time, increase their market share in the face of the shale oil production boom in the US. Hydraulic fracturing for shale oil has already added several million new barrels of oil per day to the global market. However, shale oil is expensive to extract, so lower prices averaging between $20 to $25 per barrel for the US benchmark will mean several important US producers will find their business models unsustainable soon enough and completely insolvent over the long term.
Saudi Arabia holds about 25% of the world's oil reserves, about 70% of global spare production capacity, and it is the world's largest crude exporter by a large margin.
Through various revenue model projections based on different oil price averages and export levels, the Saudi finance ministry and the Saudi Arabian Monetary Authority (SAMA) are designing financial government expenditure plans that can sustain oil prices falling as low as $30 per barrel on average for at least the next five years, with temporary dips as low as $15 per barrel, according to various government financial projections. Aramco CFO Khalid Al Dabbagh re-emphasised this point by saying "We [Aramco] are very comfortable we can meet our shareholders' expectations at $30 a barrel or even lower."

It would be a grave mistake to doubt the political resolve of the current Saudi leadership to see this new policy through.
Saudi Arabia has created a new oil market with new fundamentals. Oil producers that have not understood this tectonic shift and have failed to adapt to this new reality will suffer and will be left behind.

Link to complete article:
https://www.cnn.com/2020/03/20/perspectives/saudi-arabia-oil-market/index.html