Ask David Einhorn and he’ll tell you many shale producers aren’t making any money even at prices north of $100. Not if you accurately measure the costs. Our analysis of a few ASX-listed players drew a similar conclusion. There has been lots of capital spent, lots of ‘independent’ experts’ reports showing hundreds of millions of dollars in asset value, but very little in the way of cash flow to shareholders. And US shale doesn’t have a sheik who can turn the figurative tap on and off at will. There are thousands of independent players. They each own different assets and have varying costs of development and production. Yes, some taps will be turned back on if the oil price hits $75, but I doubt there is going to be capital pouring back into marginal projects at that price. And, with decline rates of 30% or more, US shale needs a lot of investment just to stand still. US shale might now be the marginal producer. How much it produces at $75 a barrel remains to be seen. (VIEW LINK)