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8 Pages

Another Lower 48 survival tactic: drilling zero royalty minerals

Another Lower 48 survival tactic: drilling zero royalty minerals

Report summary

The continued drive to discover economic drilling projects in the US has led to a renewed operational strategy for some producers – drill the acreage where they own mineral rights as a form of competitive advantage against their peers. In this situation, the E&P pays zero landowner royalty, setting themselves up to generate superior returns to their offset peers. For example, the removal of a 20% royalty reduces breakeven prices by between 17 and 23%.  New company structures could emerge to capitalise on this. 

What's included?

This report includes 1 file(s)

  • Another Lower 48 survival tactic: drilling zero royalty minerals PDF - 715.74 KB 8 Pages, 1 Tables, 5 Figures


This Upstream Oil and Gas Insight report highlights the key issues surrounding this topic, and draws out the key implications for those involved.

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  • Summary and background
  • E&Ps owning minerals
    • Perspective: Canada's strategy of royalty land monetisation
  • Differentiated project metrics
    • Case 1: Seneca over performing
    • Case 2: Chevron performing on par
    • Case 3: BP making up ground
      • Detail on BP's early Haynesville activity: Wood Mackenzie North America Well Analysis Tool
      • Actual activity outliers
      • Merging two models into one tactic
        • Appendix: Zero royalty company-asset files

In this report there are 6 tables or charts, including:

  • Summary and background
  • E&Ps owning minerals
  • Differentiated project metrics
    • Seneca breakevens exceed averages
    • Chevron close to Average
    • Another Lower 48 survival tactic: drilling zero royalty minerals: Image 3
    • BP's early wells place its metrics below the current average
    • Haynesville permits granted
    • Another Lower 48 survival tactic: drilling zero royalty minerals: Table 1
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