To produce than conventional sources are”. “These unconventional sources have started gaining popularity in recent years, but the crude from these sources are more costly This is not comparable with North Sea Conventional. Your first link references offshore unconventional in US.Gulf of Mexico. I have read it but do not see the comparisons of North Sea against UK onshore shale in your first two links. ![]() In order to keep the comments area safe and legal, DrillOrDrop has a new commenting policy which you can read here.īill, Thank you for your research. The Conservatives voted against a ban.ĭrillOrDrop always welcomes comments on posts. Labour and the Greens voted for a ban or in opposition to fracking. Scottish parliamentarians voted on party lines in all the decisions. The people of Scotland will have the benefit of the most substantial body of scientific evidence when the final decision is made, he said. They argued that a ban would be challenged by fracking companies if it were introduced before a research programme and public consultation were completed later this year.Įnergy minister, Paul Wheelhouse, said only the SNP had promised to make a decision on fracking based on evidence and public opinion. SNP members said the party was “deeply sceptical” about fracking. Fracking is just another fossil fuel and we don’t need it.” For more data and insight on BTU’s views on the recovery, request a copy of our Upstream Outlook.During the debate, Labour’s Claudia Beamish said: In a price range more relevant to today, discounted payback can be achieved in 21 months with prices at $40/bbl (IRR of 51.4%), 12 months at $50/bbl (IRR of 109.4%), and 9 months at $60/bbl (IRR of 195.1%).ĭespite the recent, tentative increase in drilling activity, there continues to be risks to returning to the field. With prices at $25/bbl, wells would not reach discounted payback for 11.5 years (IRR of 3.57%). With today’s drilling and completion (D&C) costs, $100/bbl prices would allow a horizontal Wolfcamp well to reach discounted payback in just under six months (IRR of 1058%). While producers tout that money can be made at lower oil prices than in the past, how should we think about the amount of time it takes to recoup an investment? Focusing on the time to discounted payout (the point at which the income from a well, discounted for cost of capital, pays off the original investment in that well) can give us a feel for at what point wells start generating profits which can be reinvested into subsequent wells.īut where do prices need to be for wells in the Permian to recover their capital in a timely manner? ![]() While the recent price crash has highlighted the risk of unchecked lending to shale drillers, shale wells remain attractive in part because North American shale resources remain vast and capital remains relatively cheap. A factor contributing to this volatility is uncertainty around what price will bring back real gains in activity, and what price will bring too much activity back to the field, pushing the global crude market back to oversupply? While analysis on this topic is highlighted regularly in our commentary, today’s feature focuses on how quickly an investment in one of the industries’ hottest areas can be recovered. However, as recent months have shown, volatility is still the market watchword. ![]() The Permian Basin has received the lion’s share of new drilling activity from US E&P companies as WTI has begun to recover from its lowest price since 2003.
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