Why Is Anyone Drilling Shale at All These Days?

Many people seem not to understand the nature of sunk costs. Once certain investments or long term commitments have been made, the money is gone. Come hell and high water. So even if you lose money on a well, you might lose even more if you don’t drill at all. It’s a bit like working with empty airline seats. Once they are at the point where they can’t sell any more tickets through normal channels, they start to fill the plane up. The economics for fillup places are vastly different from the others. Besides, we know oil and gas now. Low now, back up tomorrow. One wants to be ready.

Linkedin Thread