Permian Oil Full Cycle Costs

October 28, 2024

Permian oil full cycle costs at West Texas Intermediate (WTI) equivalent for each of Permian Central, Delaware, and Midland formations.

Permian Central

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Permian Central oil full-cycle costs at West Texas Intermediate (WTI) equivalent range from a low of USD $36.25/Bbl for wells with an Initial Productivity (IP) greater than 1800 Bbl/d to a high of USD $76.60/Bbl for wells with an IP of under 300 Bbl/d.
Average Operating costs USD $9.10/Bbl while royalties & taxes and overhead are USD $24.82/Bbl.
F&D costs range from USD $1.64-$20.24/Bbl and the 15% producer return ranges from USD $1.92-$23.67/Bbl.
The assumed WTI differential is USD $-1.23/Bbl.

Full Cycle Cost Curve

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Incorrys analysis shows that there is 3,300 MMBbl of oil resource available below USD $50/Bbl and 3,550 MMBbl available below USD $60/Bbl. Current production (2023) was almost 65 MBbl/d (23.7 MMBbl/yr).

Permian Delaware

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Permian Delaware oil full-cycle costs at West Texas Intermediate (WTI) equivalent range from a low of USD $41.41/Bbl for wells with an Initial Productivity (IP) greater than 1800 Bbl/d to a high of USD $183.94/Bbl for wells with an IP of under 300 Bbl/d.
Average Operating costs are USD $8.24/Bbl while royalties & taxes and overhead are USD $21.82/Bbl.
F&D costs range from USD $7.02-$86.60/Bbl and the 15% producer return ranges from USD $5.56-$68.51/Bbl.
The assumed WTI differential is USD $-1.23/Bbl.

Full Cycle Cost Curve

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Incorrys analysis shows that there is 28,500 MMBbl of oil resource available below USD $50/Bbl and 29,500 MMBbl available below USD $60/Bbl. Current production (2023) was about 2,930 MBbl/d (1,100 MMBbl/yr).

Permian Midland

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Permian Midland oil full-cycle costs at West Texas Intermediate (WTI) equivalent range from a low of USD $43.86/Bbl for wells with an Initial Productivity (IP) greater than 1800 Bbl/d to a high of USD $188.52/Bbl for wells with an IP of under 300 Bbl/d.
Average Operating costs are USD $8.77/Bbl while royalties & taxes and overhead are USD $23.55/Bbl.
F&D costs range from IUSD $7.67-$94.60/Bbl and the 15% producer return ranges from USD $5.09-$62.83/Bbl.
The assumed WTI differential is USD $-1.23/Bbl.

Full Cycle Cost Curve

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Incorrys analysis shows that there is 20,500 MMBbl of oil resource available below USD $50/Bbl and available below 24,000 MMBbl at USD $60/Bbl. Current production (2023) was 2,500 MBbl/d (900 MMBbl/yr).

Permian Basin Location

The Permian Basin, located in west Texas and southeast New Mexico, is the most prolific US oil basin.

Number of Drilling Locations

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Incorrys estimates that the Permian has over 145,000 drilling locations with initial productivity above 300 Bbl/d and over 140,000 drilling locations with initial productivity below 300 Bbl/d.