oil fields agree- i am thinking though at $43 current Crude- they can make sell futures for maybe even $50 range. of course they would be cannabalizing future earnings if the oil goes higher during the futures exp date.
As you know, The question that us longer term investors have is will the company cash burn keep the debtors at bay until oil recovers,
The big debts are not due to be refinanced until like 2020 so unlike some of other O&G companies that have debt payments due nearer term, our chances are getting buy until oil recovers is much better.
of course the cash burn at $25 oil has to be much higher than $40 oil.
The other factor is production. variable costs and fixed costs.
so even if they cut back on production fixed costs still tic away. so some production is actually cheaper than shutting down even if they are not making money on the well.
Another cost factor is DUCs, so my understanding is SD has been drilling and capping wells. I remember this back in the 70's when i was working the well fields.
up front costs but easier to ramp up when oil rebounds. At the time there were also tax advantages. The got Govt credit for drilling the well.
Not sure tax credits help at this point, when they are losing money anyway.
Glad to have you back on the boards oilfields- !!!
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