Slumping crude prices threaten to slow US unconventional oil development, particularly in areas such as the Bakken formation of North Dakota, where high costs leave relatively little breathing room for profits. Tight oil drilling, which was solidly profitable across North America with US benchmark WTI trading above $106/bl on 1 May, is no longer as economically attractive two months later, after crude tumbled below $80/bl. Depending on how low prices go and, more importantly, how long they stay down, the declines will at least provide a stress test, showing wide variability in economics from field to field and even within certain shale areas. Drilling of newly identified fields, such as the Cline shale of west Texas, may ramp up slower than previously expected.
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