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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.

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  • Document

    Can falling tight oil opex save marginal plays?

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Table of contents

Tables and charts

This report includes 4 images and tables including:

Images

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

Tables

  • Sampling of company-specific operating cost reductions

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