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Sensitivity of Drilling Economics to Oil and Natural Gas
Prices
These four sensitivity plots are just a small sample of the ecomomic
analysis that we have performed for oil and gas shale plays. We have literally hundreds of economic analysis
dating back over the past 10 years, which provides strong insight on the
evolution of tecnology, techniques, costs, and well performance. We
use up-to-date assessments to not only evaluate current rates of return, , but
to also compare with the historical
record, which gives us unparalled insight into the power of technological
improvement across the industry.
The sensitivities below reflect the
oil and gas prices needed to achieve a 20% AFIT assuming all else is equal
(capex, opex, production taxes, royalties, etc.). This approach has
proved particularly powerful in forecasting oil and gas prices, and in
projecting, which parts of which plays are going to be the most active going
forward.
Economic Comparison of Shale Plays: Price Sensitivity Plot, Oil Play 1
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Economic Comparison of Shale Plays: Price Sensitivity Plot, Oil Play 2
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Economic Comparison of Shale Plays: Price Sensitivity Plot, Gas, Play 3
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Economic Comparison of Shale Plays: Price Sensitivity Plot, Gas, Play 4
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