Our rig count has been slowly dropping. Get oil down to $50, and we'll have very little drilling here.
I have been involved for decades in both international and domestic oil industry, both reserves and and economics.
When oil prices are high, the best place to make money is in the US due to its excellent margins captured by the producer.
When prices decline, umch of US activity would be unprofitable as you say and an operator will not deliberately spend money without recovering his costs. Attention shifts over to foreign activity as it becomes more robust to make a profit.
Why go international? Because the international contracts are constructed to ensure massive profits to the host country after cost recovery by the operator is recovered, and only a thin profit margin for the operator. When prices are low, those host country profits suffer tremendously but the operator still is able to recover his costs in crude take, while still ekking out some profit.
All this means is that risks for the operator is minimized during low crude prices.
If crude prices remain low, we will see a resurgence in international activity by major operators and a lot of smaller domestic operators/service companies go dormant.
But we need to remember: that oil and gas is not going anywhere and will remain for future collection when prices return. Industry will have to build itself back up, which will be unfortunate for current players as, from past downturns, the wealth of knowledge will not easily be reestablished, but it will return.
