The average oil and gas company have Operating and Transportation Costs per BOE at $12.80, General and Administration Costs per BOE of $5.57 and DD&A Costs per BOE of $27.76. The total costs are $46.14 per BOE of oil or $7.69 per MCF of natural gas. Neither of these costs include royalties, which would probably add around 20% of the sell price per BOE.
Just to be clear, DD&A (depletion, depreciation and amortization) costs give a good representation of how much it costs to add reserves to the company. DD&A costs show the acquisition costs of proved properties and the costs of wells and equipment and are amortized over the life or proved reserves.
Here is a list of companies with their respective Operating and Transportation Costs, G&A costs and DD&A costs vs. their average selling price and the potential profit or loss per BOE.
| Company | Op Costs / BOE | G&A/ BOE | DD&A / BOE | Total Costs BOE Oil | Average Sell Price/BOE | Profit/Loss per BOE |
| Fairwest | $15.55 | $2.62 | $88.45 | $106.62 | $37.88 | $(68.74) |
| Action | $30.84 | $11.54 | $45.70 | $88.08 | $39.29 | $(48.79) |
| Questerre | $12.18 | $17.83 | $53.65 | $83.66 | $40.56 | $(43.10) |
| One | $24.69 | $10.76 | $32.71 | $68.16 | $31.27 | $(36.89) |
| Canadian Phoenix | $16.81 | $23.63 | $45.04 | $85.48 | $53.27 | $(32.21) |
| Result | $9.74 | $7.34 | $30.34 | $47.42 | $19.02 | $(28.40) |
| Insignia | $15.44 | $8.97 | $31.73 | $56.14 | $28.18 | $(27.96) |
| Dejour | $17.38 | $19.30 | $25.10 | $61.78 | $34.61 | $(27.17) |
| Fortress | $18.07 | $8.38 | $31.74 | $58.19 | $37.35 | $(20.84) |
| Monterey | $13.43 | $3.46 | $29.48 | $46.37 | $26.42 | $(19.95) |
| Redcliffe | $17.63 | $6.79 | $24.71 | $49.13 | $30.04 | $(19.09) |
| Culane | $12.48 | $4.31 | $33.56 | $50.35 | $31.81 | $(18.54) |
| Bellamont | $13.31 | $4.04 | $30.63 | $47.98 | $29.99 | $(17.99) |
| Great Plains | $23.06 | $6.56 | $31.42 | $61.04 | $43.35 | $(17.69) |
| Second Wave | $27.42 | $6.15 | $25.86 | $59.43 | $42.30 | $(17.13) |
| Twin Butte | $16.03 | $5.15 | $27.90 | $49.08 | $32.07 | $(17.01) |
| Anderson | $9.58 | $2.34 | $29.65 | $41.57 | $24.70 | $(16.87) |
| Crocotta | $13.41 | $5.98 | $32.10 | $51.49 | $34.82 | $(16.67) |
| Midnight | $9.16 | $5.35 | $33.82 | $48.33 | $31.99 | $(16.34) |
| Argosy | $6.90 | $12.89 | $22.73 | $42.52 | $26.21 | $(16.31) |
| Petro-Reef | $12.32 | $3.57 | $27.07 | $42.96 | $26.85 | $(16.11) |
| Sure | $10.41 | $4.82 | $23.83 | $39.06 | $23.54 | $(15.52) |
| Prospex | $10.23 | $3.03 | $29.34 | $42.60 | $27.32 | $(15.28) |
| Orleans | $12.39 | $3.32 | $26.29 | $42.00 | $27.03 | $(14.97) |
| Canext | $11.80 | $5.53 | $23.98 | $41.31 | $26.49 | $(14.82) |
| Triton | $9.94 | $4.76 | $22.75 | $37.45 | $23.62 | $(13.83) |
| BlackPearl | $13.94 | $4.58 | $41.72 | $60.24 | $47.07 | $(13.17) |
| Diaz | $15.23 | $(0.90) | $30.17 | $44.50 | $31.53 | $(12.97) |
| International Sov | $8.50 | $4.14 | $22.91 | $35.55 | $24.28 | $(11.27) |
| Cinch | $3.23 | $3.74 | $25.19 | $32.16 | $21.90 | $(10.26) |
| Nuloch | $11.36 | $6.79 | $26.87 | $45.02 | $35.50 | $(9.52) |
| Midway | $9.33 | $5.55 | $23.07 | $37.95 | $28.67 | $(9.28) |
| Painted Pony | $16.89 | $4.61 | $28.07 | $49.57 | $40.48 | $(9.09) |
| Arsenal | $17.72 | $5.31 | $33.13 | $56.16 | $47.35 | $(8.81) |
| TRUE | $14.83 | $2.90 | $30.80 | $48.53 | $39.85 | $(8.68) |
| Wrangler West | $15.67 | $2.72 | $22.05 | $40.44 | $32.16 | $(8.28) |
| Twoco | $7.32 | $3.25 | $25.07 | $35.64 | $27.49 | $(8.15) |
| Cequence | $17.39 | $13.37 | $23.98 | $54.74 | $47.00 | $(7.74) |
| Open Range | $5.97 | $4.22 | $25.18 | $35.37 | $28.03 | $(7.34) |
| Yoho | $8.55 | $1.70 | $19.69 | $29.94 | $23.12 | $(6.82) |
| Berens | $8.52 | $3.55 | $23.22 | $35.29 | $28.61 | $(6.68) |
| Seaview | $14.35 | $3.04 | $26.79 | $44.18 | $39.26 | $(4.92) |
| Vero | $9.99 | $2.73 | $19.50 | $32.22 | $27.49 | $(4.73) |
| Delphi | $13.39 | $1.97 | $24.68 | $40.04 | $37.49 | $(2.55) |
| Ironhorse | $2.98 | $3.81 | $14.85 | $21.64 | $20.85 | $(0.79) |
| West | $11.06 | $4.11 | $38.95 | $54.12 | $54.08 | $(0.04) |
| Terra | $7.42 | $3.13 | $12.72 | $23.27 | $24.47 | $1.20 |
| Rock | $12.40 | $2.58 | $22.10 | $37.08 | $38.37 | $1.29 |
| Angle | $4.56 | $3.15 | $15.57 | $23.28 | $25.60 | $2.32 |
| Storm | $7.12 | $1.71 | $14.43 | $23.26 | $25.81 | $2.55 |
| Zapata | $12.70 | $4.21 | $20.20 | $37.11 | $39.88 | $2.77 |
| Buffalo | $14.64 | $4.81 | $14.89 | $34.34 | $37.27 | $2.93 |
| Zargon | $13.08 | $4.29 | $18.09 | $35.46 | $40.92 | $5.46 |
| Stonefire | $5.86 | $1.96 | $17.26 | $25.08 | $31.70 | $6.62 |
| Arcan | $11.50 | $6.92 | $23.11 | $41.53 | $52.01 | $10.48 |
| Freehold | $5.39 | $2.86 | $23.87 | $32.12 | $42.99 | $10.87 |
| Bonterra | $16.12 | $2.43 | $10.76 | $29.31 | $44.44 | $15.13 |
| Average | $12.80 | $5.57 | $27.76 | $46.14 | $33.61 | $(12.42) |
Two companies have been omitted that were on the last post due to the fact that there was no way to determine their average sell price. They were Dee Three and Eagle Rock.
Based upon the above figures, only 11 companies (or 19%) actually make money when you take the average sell price and back out the Operating/transportation cost, G&A cost and DD&A costs.
If you add royalties at an average rate of 20% of the sell price, then only 4 companies can make money on each BOE. They are Bonterra at $6.24, Freehold at $2.27, Stonefire at $0.28 and just scraping by is Arcan at $0.08. That's only 7% of the sample companies.
Another approach is to remove the DD&A costs and use the industry standard of $16/boe for find and develop costs and add approximately 20% of the average sell price for royalty costs. If you do this, there are only 6 companies of the 57 that would turn a profit on each boe. They are Bonterra, Stonefire, Black Pearl, Arcan, Freehold and West.
In looking at the prices received and the costs, these junior companies may have problem in the future unless they can cut their costs. There is only so long that you can produce oil and gas at a loss before that catches up to you.
These opinions are mine and may not reflect your view. If you would like to contact me, then please feel free to do so at info@argentis-group.com.
Posts
No comments:
Post a Comment