Economic Ranking of North American Unconventional Oil and Gas Basins: Looking for the Most Cost Efficient Play

摘要

Oil and gas producers focus their exploration and development activities on the most cost efficient oil and gas plays. The challenge is to analyze full cycle cost for each basin on a consistent basis with taking in to an account various cost components such as finding and development cost, operational cost, royalties and taxes, producer’s return, overhead, basis differential and others. This paper describes the methodology of the analysis of oil and gas costs. The focus was made on unconventional resources. A mathematical model was developed to quantitatively assess cost of different producers for various unconventional gas plays. The cost and well production data was obtained from the public sources. The data was statistically processed and geological models for each basin were integrated to the analysis. Oil and gas resources for each basin were estimated and economic models were developed. The proposed methodology has been used to rank most unconventional oil and gas basins based on their costs per unit of production. The study shows the most efficient and the less efficient plays in North America. The proposed methodology and the study can be essential component the corporate planning process. Particularly results of analysis in form of cost curves can be used for oil and gas price forecast.