Oct 23 (Reuters) - A sharp decline in oil prices over the past four months has called into question the sustainability of North American shale production. Global benchmark Brent crude has fallen about 25 percent since June due to oversupply, weakening demand and indications that key oil producers, particularly Saudi Arabia, have limited appetite to intervene in prices. Bernstein Research said this week that about a third of U.S. shale production would be uneconomical if oil prices were to fall to $80 per barrel. Brent was trading at $86.40 and U.S. crude at $81.55 at 1735 GMT on Thursday. Below are several analysts' estimates of the breakeven oil price for various shale fields in North America. KLR GROUP (Oct. 22) "The U.S. E&P industry needs (more than) $90 NYMEX, about $100 Brent, oil prices to maintain the current oil rig count of 1,500-1,600 rigs, which is intrinsic to our U.S. oil production outlook. A comparable NYMEX oil price is needed to maintain the projected pace of Canadian oil sands development." =============================================================== MORNINGSTAR INC (Oct. 21) "Our analysis suggests that the average breakeven for our E&P coverage is $70 per barrel, well below our $90 per barrel marginal cost and below today's $80 per barrel WTI (West Texas Intermediate) oil price." "Our estimate of the marginal cost for oil remains $90 per barrel WTI and $100 per barrel Brent." =============================================================== BERNSTEIN RESEARCH (Oct. 20) "We estimate that about a third of U.S. shale oil production is uneconomic at $80 per barrel WTI. We disagree with other estimates, including those cited by the IEA, which suggest the vast majority of shale oil production is robust at such prices. Our expectation is that (the) oil price will revert back to a level where a much smaller portion of production is uneconomic." =============================================================== ROBERT W. BAIRD EQUITY RESEARCH (Oct. 14) "We estimate $73 as the weighted average breakeven point for U.S. supply." SHALE FIELD BREAKEVEN OIL PRICE PER BARREL Eagle Ford Liquids Rich $53 Wolfcamp North Midland $57 Bakken Core $61 Niobrara Extension $64 Eagle Ford Oil $65 Niobrara Core $68 Wolfcamp South Midland $75 Bakken Non Core $75 Texas Panhandle $81 Mississippi Lime $84 Barnett Combo $93 ============================================================== MORGAN STANLEY (Oct. 14) "U.S. oil shale is moving down the cost curve and adding to the global oil production mix as operators continue to improve drilling and fracturing performance - essentially getting more from shale wells for less capex." "U.S. shale is now no longer the marginal barrel, with cash breakevens in some major U.S. shale plays having dropped by up to $30 per barrel since 2012." SHALE BREAKEVEN OIL PRICE PER BARREL OF OIL EQUIVALENT US EAGLEFORD $60-80 ================================================================ UBS INVESTMENT RESEARCH (Oct. 14) BASIN BREAKEVEN OIL PRICE PER BARREL EAGLE FORD $43.34 MIDLAND NORTH WOLFCAMP $52.56 MIDLAND SOUTH WOLFCAMP $62.74 DELAWARE BONE SPRING $64.67 BAKKEN $65.06 NIOBRARA $72.75 DELAWARE WOLFCAMP $74.86 UINTA-VERTICAL $78.16 MISSISSIPIAN LIME $85.54 DELAWARE AVALON $85.87 ANADARKO BASIN $88.83 UTICA-HORIZONTAL $111.48 ================================================================ STIFEL, NICOLAUS & CO INC (Oct. 13) "The weaker portions of several U.S. shale plays, or newer areas that are in the delineation phase and have not benefited from development drilling, require oil prices above $80 per barrel in order to generate a pretax internal rate of return of 20 percent, which is a reasonable threshold for most companies." =============================================================== WELLS FARGO SECURITIES (Oct. 13) "If the crude oil market believes a price-driven market share war is under way and 2015 demand growth will be meaningfully lower than prior expectations, then our updated view is that U.S. onshore 2015 E&P budgets would need to be trimmed so as to moderate production growth relative to lower demand expectations. "In such an environment we estimate that WTI prices of $85-90 per barrel versus our current estimate of $96 per barrel would be required." ============================================================= GOLDMAN SACHS (Oct. 10) BASINS BREAKEVEN OIL PRICE PER BARREL BAKKEN CORE, $70-$80 PERMIAN DELAWARE, UTICA, EAGLE FORD OIL & $80-$90 WET GAS BAKKEN NON-CORE $90-$110 ================================================================ CREDIT SUISSE (Sept. 30) BASIN BREAKEVEN OIL PRICE PER BARREL Marcellus Shale - SW liquids rich $24.23 Marcellus Shale - Super Rich $25.63 Utica - Wet gas $32.39 Mississippian Horizontal - East $42.15 Utica - Liquids Rich $44.04 Eagle Ford - Liquids Rich $46.05 Niobrara - Wattenberg $46.10 Wolfcamp - N. Midland (Horizontal) $53.92 Eagle Ford - Oil Window $55.29 Wolfcamp - S. Midland (Horizontal) $61.57 Mississippian Horizontal - West $64.05 Wolfberry $64.63 Bakken Shale $64.74 Wolfcamp - N. Delaware (Horizontal) $68.54 Uinta - Green River $68.77 Uinta - Wasatch (H) $72.15 Granite Wash - Liquids Rich $73.10 Horizontal Uinta - Wasatch (V) $74.95 Barnett Shale - Southern Liquids $84.45 Rich (Reporting by Swetha Gopinath,; Sneha Banerjee and Manya Venkatesh in Bangalore)
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