E&P Companies' Costs Hit 10-Year Low in 2018
The world’s total exploration and development (E&D) costs in 2018 was the lowest since 2009, according to a May 30 release from the U.S. Energy Information Administration (EIA).
The findings, based on analysis of 116 E&P companies’ annual reports, show that the companies added a net 10.3 billion barrels of oil equivalent (boe) to their proved reserves during 2018. Total E&D costs for these companies declined nine percent from 2017 when calculated as dollars per BOE of proved reserves added.
The EIA found that global E&D costs increased in 2018 for the second year in a row, with changes in nominal year-over-year costs varying among regions.
The oil and gas industry has experienced significant cost deflation since the onset of the downturn in 2014, therefore nominal costs incurred in different years may not be directly comparable. The costs provide an idea of the expenditures needed to add one barrel of proved reserves.
The disparity between the timing of companies’ capital expenditures and the formal reporting of changes to their proved reserves is the reason why standard practice is to average results over several years.
Analyzed this way, the 2018 E&D costs incurred at $15.20 per additional boe of proved reserves was the lowest it’s been since 2009.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- UK Oil Regulator Publishes New Emissions Reduction Plan
- PetroChina Posts Higher Annual Profit on Higher Production
- McDermott Settles Reficar Dispute
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- USA Commercial Crude Oil Inventories Increase
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call
- India Halts Russia Oil Supplies From Sanctioned Tanker Giant
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- Centcom, Dryad Outline Recent Moves Around Red Sea Region
- PetroChina Set to Receive Venezuelan Oil
- Czech Conglomerate to Buy Major Stake in Gasnet for $917MM
- US DOE Offers $44MM in Funding to Boost Clean Power Distribution
- Oil Settles Lower as Stronger Dollar Offsets Tighter Market
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension
- Equinor Makes Discovery in North Sea