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Can falling tight oil opex save marginal plays?

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10 March 2016

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.

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:

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

What's included

This report contains:

  • Document

    Can falling tight oil opex save marginal plays?

    PDF 408.48 KB

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