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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

Description

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

This report helps participants, suppliers and advisors understand trends, risks and issues within the upstream oil and gas industry. It gives you an expert point of view to support informed decision making.

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.

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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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