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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.
Table of contents
- 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
Tables and charts
This report includes 24 images and tables including:
- Estimated wellhead breakeven gas prices at 12.5% discount rate for two EUR 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%
What's included
This report contains:
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