[vardump]

1. 19th century well implies at most a few hundred feet depths. There just aren't spots left on earth where such a well would still yield meaningful amounts of oil.

2. Principal driver behind those horizontal wells is money. Those wells cost 2-3x more to complete. Horizontal tech has advanced, but in the end that advancement has been dollar driven. Expensive oil made it economical.

[tahssa]

The distinction being made is in the technology required for OPEC wells. Conventional oil fields (most OPEC Wells) require the same tech that 19th century wells did. Just because you go a little deeper doesn't change the tech.

I agree oil price played a major role in developing horizontal tech, but it's become more about the cost being driven down and is why the U.S. is still doing it at $35 a barrel (which is, on a relative basis, the same as 10+ years ago). Either way I don't think your point #2 works against anything I've mentioned.

[vardump]

> is still doing it at $35 a barrel

They'd still be doing it at any loss figure above operational costs to maintain cash flow. The cost to drill the well is already sunk. So it makes sense to operate the well at heavy loss. Some money is better than no money.

> Either way I don't think your point #2 works against anything I've mentioned.

My point was the economic reasons were why horizontal drilling became feasible. It could have been done in the eighties if oil prices were high enough back then.

[tahssa]

The cost to drill a well is not sunk when they haven't drilled the well yet.

Well some companies are in fact drilling wells at a loss, but only because they have to pay bills while they pray for oil prices return and potentially survive this supposed rough patch. However, that says more about their debt situation than it does the cost of horizontal drilling.

Bottom line is that some companies are in fact making a profit drilling horizontal shale wells @ $35 barrel.