Casey Research
Not all shales are equal. Some shales are deeper than others; and some are dry gas, while others are gas with liquids. In North America, billions of dollars have gone into developing all types of shale formations to extract as much natural gas, natural-gas liquids, and oil as possible. The production from shale formations has truly been a game-changer for North America, but yet, oil is still more than US$100 barrel.
How can oil be more than US$100/bbl even though the shale revolution was supposed to save us from high oil prices?
First off, shale wells are very expensive to drill and complete. Including all costs, it can cost up to US$15 million to drill, frac, and complete a deep horizontal well. Because of the success of the shale revolution in North America, natural-gas prices have decreased significantly. In fact, in many parts of North America, the natural-gas shales are uneconomic without NGLs (natural-gas liquids) as a byproduct.
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