Insight
Another Lower 48 survival tactic: drilling zero royalty minerals
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
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.
Table of contents
- Summary and background
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E&Ps owning minerals
- Perspective: Canada's strategy of royalty land monetisation
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Differentiated project metrics
- Case 1: Seneca over performing
- Case 2: Chevron performing on par
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Case 3: BP making up ground
- Detail on BP's early Haynesville activity: Wood Mackenzie North America Well Analysis Tool
- Actual activity outliers
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Merging two models into one tactic
- Appendix: Zero royalty company-asset files
Tables and charts
This report includes the following images and tables:
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Seneca breakevens exceed averagesChevron close to AverageAnother Lower 48 survival tactic: drilling zero royalty minerals: Image 3
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BP's early wells place its metrics below the current averageHaynesville permits grantedAnother Lower 48 survival tactic: drilling zero royalty minerals: Table 1
What's included
This report contains:
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