GULF MARGINAL PRODUCTION—2: Model identifies marginal structures, future output

12/14/2009
All producing properties are unique and have costs and benefits specific to each stage of its life cycle.As fields mature and operations transition into the later stages of their production cycle, decreasing revenue streams, higher operating costs, and fewer upside opportunities lead to declining profitability. Eventually, properties are abandoned when marginal cost exceeds the marginal revenue of production.In Part 2 of this three-part series, we categorize the inventory of committed assets in the shallow water Gulf of Mexico and introduce the model framework used to identify marginal structures and the level of their future production.Asset classificationCommitted assetsIn January 2007,...
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