Shale drillers adapting to low oil prices, report says

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Lower costs and improved productivity have enabled U.S. shale oil drillers to made major strides in adapting to lower crude prices, energy consultant Wood Mackenzie says.

Shale drillers have cut the costs of producing new supplies of oil by as much as 40% in the past two years by pushing for lower rates from the companies that provide rigs, pipes and other services.

Wood Mackenzie estimates that oil companies could make money in west Texas' Bone Spring and Wolfcamp tight oil plays with $37/bbl oil, the Eagle Ford Shale in south Texas could turn a profit at $48/bbl, the average breakeven price in North Dakota’s Bakken Shale is $58/bbl, while breakeven at Oklahoma’s SCOOP region is $35/bbl.

The report says the big winners will be incumbent operators in the key shale oil patches in the lower 48 U.S. states, such as in the Mid-Continent and Permian Basin, including U.S. independents such as EOG Resources (EOG -1.7%), Pioneer Natural Resources (PXD -2.1%), Continental Resources (CLR -2.1%) and Apache (APA -1.9%), as well as oil giants Exxon Mobil (XOM -0.5%) and Chevron (CVX -0.2%).