CO2-EOR in Shale: the economics

We have modelled the economics of CO2-EOR in shale, after interest in this topic spiked 2.3x YoY in the 2019 technical literature. Our deep-dive research into the topic is linked here.

The economics appear very positive, with a 15% IRR under our base case assumptions, and very plausible upside to 25-30%.

The model also allows you to stress-test your own assumptions such as: oil prices, gas prices, CO2 prices, CO2 tax-credits, compressor costs and productivity uplift. The impacts on IRR, NPV and FCF are visible.

The Ascent of Shale

This model contains our live, basin-by-basin shale forecasts. We model each of the Permian, Bakken and Eagle Ford, as a function of the rig count, drilling productivity, completion rate, well productivity and type curves. Thus, we derive production and financial expectations.

Our numbers hinge on the productivity gains described in our thematic research. Shale productivity trebled from 2012-2018. We think it can effectively double again by 2025. This would unleash 21Mbpd of US liquids production by 2025, within cash flow at a flat $50/bbl Brent input.

Mero: Economic Model

We have modeled the economics of the Mero oilfield (formerly known as Libra), using public disclosures and our own estimates.

Our model spans >250 lines of inputs and outputs, so you can flex key assumptions, such as oil prices, gas prices, production profiles and costs.

In particular, we have tested the impact of different gas bottleneck scenarios on the field’s ultimate value.

Johan Sverdrup: Don’t Decline

Equinor is deploying three world-class technologies to mitigate Johan Sverdrup’s decline rates, based on reviewing c115 of the company’s patents and dozens of technical papers. This 15-page note outlines how its efforts may unlock an incremental $3-5bn of value from the field, as production surprises to the upside.

Johan Sverdrup: Economic Model

We have modelled the economics of Equinor’s Johan Sverdrup oilfield, using public disclosures and own estimates. Our model spans >250 lines of inputs and outputs, so you can flex key assumptions, such as oil prices, gas prices, production profiles and costs. In particular, we have tested the impact of different decline rates and recovery factors on the field’s ultimate value.

Offshore Economics: the Impact of Technology

This data-file quantifies the impact that technology can have on offshore economics. We start with a 250-line field model, for a typical offshore oil and gas project. We then list our “top twenty” offshore technologies, which can improve the economics. In a third tab, we update our base case model, line-by-line, to reflect these twenty technologies. Finally, the “before” and the “after” are compared and contrasted.

Why the Thunder Said?

This 8-page report outlines the ‘four goals’ of Thunder Said Energy; and how we hope we can help your process…

Oil Major Cash Flow and Operating Leverage

This data-file tabulates the approximate cash flow, capex and ‘pre-tax costs’ of Oil Majors, in order to illustrate the operational leverage within the group. Every $1 of free cash flow comes after $3 of cost. Hence small reductions in the cost base, through technology, deliver 3x larger uplifts to free cash flow. This is why we are screening Oil companies’ technology-capabilities.