U.S. crude threatened to break below $40 per barrel for the first time since early 2009 this week, raising fresh fears about the cost of producing crude in America's oil patch—or perhaps "patches" is the better term.
Perhaps the only fall in the energy complex as spectacular has been the break-even cost to U.S. drillers of producing a barrel of oil.
Those costs vary widely across the country's shale fields—from Texas' prolific Permian Basin to the Northeast's gassy Marcellus Shale—but productivity gains have helped producers continue pumping. However, with many analysts now expecting U.S. crude to fall into the $30s, the question is how low can prices go before producers turn off the tap.
It's still cost-effective down to prices of $10 per barrel to maintain many existing wells across the United States, which is why drillers have not shut in production. But producers face a significantly higher bar when it comes to authorizing new production, because the cost of drilling and finishing a well accounts for the lion's share of lifetime costs.
"I think we're going to test those break-evens at every play across the country," Michael Scialla, energy research analyst at Stifel Nicolaus told CNBC.