BAS: Industry’s 2004 finding, development costs soar

The aggregate fully loaded finding and development (F&D) cost for a study group of 12 major integrated international oil companies and 60 US independent companies increased considerably in 2004 over 2003, reported Banc of America Securities (BAS) in a report released April 18 (see Fig.). Responsible for these increases, BAS said, was a sharp escalation in acquisition and service costs, coupled with fewer added reserves and net negative reserve revisions.The integrated companies’ fully loaded F&D cost rose to an all-time high of $9.55/boe in 2004 from $7/boe in 2003, a jump “primarily driven by a 50% drop in proven reserves added per successful well in the US and net ne...

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