Insight
Sour gas could sour earnings for some Permian operators
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Hydrogen Sulfide (H2S) is proving to be an expensive headache for some operators in the Permian, and there may be more trouble to come. Two main mechanisms are primarily responsible for generating H2S in the Permian, allowing us to identify the regions and operators most likely to be impacted. Analyzing the treatment cost at varying concentrations suggests economic impacts can range from moderately troublesome to economically prohibitive. We believe holders of significantly H2S-prone acreage will need to either delay production or seek scale to spread the costs across a larger production base.
Table of contents
- Executive Summary
- Overview
- H 2 S formation and location
- Economic implications
- Operator-specific impact
- Conclusion
- Major costs associated with H 2 S
Tables and charts
This report includes the following images and tables:
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GOR vs H2S risk probabilitiesFully burdened half-cycle economicsH2S over 100 ppm reported via H9 form or through earnings
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Technical Appendix and Assumptions
What's included
This report contains:
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