Tornado Alley (PROG)

[Zorax]

“You’re better off deferring that high production rate into a period with better pricing,” Woods said on an investor call. “Depending on how the the market evolves we’ve got the flexibility to bring a lot of those wells back on quickly.”

Thing is at 19 a barrel big oil is still making profits because the barrel cost is below 15 total outlay. The unprofitable they are referring to is not getting the 500% or more profit per barrel they are accustomed to. Imagine the profit margins when it costs you roughly 20 and you're getting 110 per barrel.

For many companies, a key data point in deciding which wells to shut is the operating cost per barrel. Oil has traded in New York for less than $20 a barrel since April 16, closing at $19.78 on Friday. A study by BloombergNEF analysts shows that 45% of the production they surveyed is unprofitable at $30 a barrel while conventional, non-fracked wells and high-cost producers in the Bakken basin in Montana and North Dakota need crude to trade above $45 a barrel.