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17 Pages

Argentina: only the best tight gas wells break even at current gas prices


Argentina: only the best tight gas wells break even at current gas prices

Report summary

Operators in Argentina are successfully reversing the Neuquén basin's gas production decline by targeting low-permeability, tight gas reservoirs. Tight gas production has ramped up considerably, reaching 565 mmcfd or 16 million cubic meters per day (Mm3/d) in Q1 2016, representing a quarter of Neuquén basin's output. The large variability in results indicates that tight gas resources in Neuquén will continue to require a statistical development approach. Using type wells and current development costs, we determine the formations with the highest well performance and lowest breakevens. 

What's included?

This report includes 2 file(s)

  • Argentina: only the best tight gas wells break even at current gas prices PDF - 2.04 MB 17 Pages, 3 Tables, 21 Figures
  • Tight gas developments in Argentina.xls XLS - 569.50 KB

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.

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  • Summary
  • Tight gas sustains basin production levels
    • Tight gas well productivity is far from uniform
    • Total and Petrobras show highest IP90 rates
      • Mulichinco horizontal well rates are now four times higher than vertical rates
      • The best Lajas wells achieve IP90 rates over 200 km3/d, but most stay below 75 km3/d
      • Limited well sample in Punta Rosada, but early results are encouraging
      • Well costs and EURs are positively correlated
      • Higher EURs are more achievable than lower costs in the short term
      • Conclusion

In this report there are 24 tables or charts, including:

  • Summary
    • Estimated wellhead breakeven gas prices at 12.5% discount rate for two EUR levels
  • Tight gas sustains basin production levels
    • Neuquén basin tight gas formations
    • Neuquén basin tight gas production
    • Argentina: only the best tight gas wells break even at current gas prices: Table 1
    • Neuquén basin tight gas well count
    • Argentina: only the best tight gas wells break even at current gas prices: Image 5
    • Tight gas wells drilled 2006 – 2015 by IP90 rate
    • A box and whisker diagram gives a sense of performance distribution
    • Distribution of tight gas well IP90 rates by formation
    • Distribution of tight gas well IP90 rates by operator
    • Total's Mulichinco wells IP90 rates
    • YPF and Petrobras Mulichinco wells IP90 rates
    • Lajas vertical well IP90 rates
    • Punta Rosada vertical wells IP90 rates
    • Estimated well ultimate recovery based on IP90 rates
    • Formation depth and well cost estimates
    • Well cost as a function of formation depth
    • Well cost versus IP90
    • Well cost versus EUR
    • IP90 capital efficiency: well cost relative to production rates
    • EUR capital efficiency: well cost relative to total well recovery
    • Estimated breakeven gas prices at 12.5% discount rate for two EUR levels
    • Type-well breakeven well cost at 12.5%
    • Upper-quartile well breakeven well cost at 12.5%
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