Despite sharply rising drilling and service costs, the costs per barrel of finding, developing, and acquiring (FD&A) oil and natural gas increased moderately in 2011 and remain below levels of 2008, says Fitch Ratings.
The median FD&A cost among 19 of the largest US exploration and production companies rose to $18.51/boe in 2011 from $14.89/boe in 2010, according to the credit-rating firm.
The 2008 median was $20.31/boe.
Average FD&A costs for the sample were $20.57/boe in 2011, $18.23/boe in 2010, and $26.59/boe in 2008.
“A key factor limiting the scope of FD&A increases is technology improvements (expanded horizontal drilling, higher frac stages per well, and other efficiency gains), which have helped offset rising costs on a dollar-per-boe basis,” Fitch Ratings says.
The median reserves addition across the firm’s sample was 4.8% in 2011.
