Strazza, good point and keep in mind revenue = price x volume. As long as you can sell everything and have surplus capacity any increase/decrease in price can be negated by offset production ie Lower price x higher production gives the same result. Once fixed costs are covered by set production rate and any additional production is at the incremental cost.
If the low OP has resulted in lower drilling costs this will give an upfront cash saving for those that have cash to drill and the lower capex required should result in more favourable returns in the long term. For future drilling imo the points cmon makes are most relevant to this point as for new wells the capex required and where it comes from are essential. The all up cost is not as important imo for completed wells as the cash has already been spent.
This is just my opinion to add to the discussion. All companies are at different stages so unless all aspects are considered the driver for one may not be as important to another. Companies less developed or with high debt will probably be more effected by price and unless hedged have larger exposure to OP.
Bw
SSN Price at posting:
0.9¢ Sentiment: Hold Disclosure: Held
