"We estimate that the global oil & gas industry needs c.US$115/bl to be free cash flow neutral after capex and dividends. Exhibit 3 shows that our estimate of the average breakeven oil price for the industry (for the purpose of this chart we include the seven US and European majors) is currently US$115/bl on aggregate, while it was US$84/bl only four years ago.
"The industry is effectively spending today for a high oil price environment, in our view. As the industry is already spending at a level consistent with US$115/bl, further capex growth from current levels will likely be more constrained unless oil prices move higher."
Saturday 27 October 2012
from Goldman-Sachs (FT):
Friday 26 October 2012
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