Tight oil profitability has been the focus of much debate since the oil price collapse of 2014. Its ability to scale down (and up) quickly and break even at low price points has made the Permian the star of the show for investors, but there are still plenty of skeptics when it comes to tight oil profitability. However, Wood Mackenzie's new report, "When will tight oil make money?," calculates the five largest tight oil players could become cash-flow positive by 2020.
Tight oil's road may not be completely smooth, but it is the most attractive investment theme in the global industry because the potential resource is so huge -- some of it low-cost. Wood Mackenzie believes that by 2020, production will climb to nearly 7 million barrels per day from 4.2 million barrels per day, based on its West Texas Intermediate (WTI) assumption of $63 per barrel. And the five leading tight oil specialists will start to deliver significant positive free cash flow from the same year.
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