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Can falling tight oil opex save marginal plays?


Can falling tight oil opex save marginal plays?

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 includes 1 file(s)

  • Can falling tight oil opex save marginal plays? PDF - 408.48 KB 5 Pages, 1 Tables, 3 Figures

Description

Globally, the industry is looking for the next big unconventional discovery after the success seen in the U.S. Lower 48. Argentina's Vaca Muerta has shown it can go head to head with US plays. But, as investors looks for the next big unconventional opportunity, will Argentina be able to attract enough investment to exploit the shale's full potential?

This Vaca Muerta development study report provides ground-breaking well-by-well analysis of production, well performance, and economics. The play is divided into three distinct sub-plays and this report provides insight into production, acreage positions, costs, and type-well economics. The sub-plays likely to drive value creation are identified, as well as the oil and gas prices and efficiency gains needed to produce positive returns.

The study enables potential investors, governments and companies to evaluate the relative attractiveness and value of acreage positions. Furthermore, the study helps benchmark the performance of each Vaca Muerta sub-play with that of North American analogues.

These findings are based on original well data from Argentina along with Wood Mackenzie's expert analysis.

Wood Mackenzie's 500 dedicated analysts are located in the markets they cover. They produce forward-looking analysis at both country and asset level across the globe, backed by our robust proprietary database of trusted research. Proprietary data means a superior level of analysis that is simply not available anywhere else. Wood Mackenzie is the recognised gold standard in commercial data and analysis.

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

In this report there are 4 tables or charts, including:

  • Opex ranges are wide
    • Lower 48 operating cost distribution
  • Opex matters more now than ever
    • Opex as a percent of total Lower 48 spend
    • Sampling of company-specific operating cost reductions
  • Examining the trend
    • Marginal tight oil plays, current and required breakeven opex
  • A single bright point
  • Additional headwinds
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