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Can falling tight oil opex save marginal plays?

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Report summary

Focused tight oil operators have recently drawn attention to how field operating costs have fallen by 20-30%. Per unit opex is virtually always lower than capex, so how important is it to mange this expense in a low price world? Our models indicate that further reducing US tight oil opex in a US$30/bbl price environment can help support margins in a few NPV positive plays. But for those assets out of the money, additional opex reductions will not be enough to transform the assets into economic projects.

What's included

This report contains

  • Document

    Can falling tight oil opex save marginal plays?

    PDF 408.48 KB

Table of contents

  • Opex ranges are wide
  • Opex matters more now than ever
  • Examining the trend
  • A single bright point
  • Additional headwinds

Tables and charts

This report includes 4 images and tables including:

Tables

  • Sampling of company-specific operating cost reductions

Images

  • Lower 48 operating cost distribution
  • Opex as a percent of total Lower 48 spend
  • Marginal tight oil plays, current and required breakeven opex

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