In an announcement on Tuesday night (well, Wednesday morning in Australia), Australian mining giant BHP said it would shut down 40% of its US shale oil rigs over by the end of its fiscal year.
BHP CEO Andrew Mackenzie said:
“In Petroleum, we have moved quickly in response to lower prices and will reduce the number of rigs we operate in our Onshore US business by approximately 40 per cent by the end of this financial year. The revised drilling program will benefit from significant improvements in drilling and completions efficiency. Our ongoing shale investment program will remain focused on our liquids-rich Black Hawk acreage. However, we will keep this activity under review and make further changes if we believe deferring development will create more value than near-term production.”
The good news of course, is that the oil will still be there when we need it. The bad news, as discussed here before, is that we find ourselves in the banana republic position where low oil prices could just prove to be a net drag on the economy as a whole.
But I’m loving the prices at the pump.