Shale oil production costs are captured in this data-file. In our base case, a $60/bbl oil price unlocks a 30% well-level IRR at a Permian-type well in 2025, costing $10M in capex, IP-ing at 1kbpd, with other costs based on technical papers and the reporting from leading US E&Ps. Shale oil economics can be stress-tested in the data-file.
US shale oil is among the most flexible sources of supply in global oil markets, capable of growing at 2Mbpd/year under extremely high oil prices, or conversely declining by over 1Mbpd/year during times of very weak oil prices. This can be seen in the history – and in our forecasts – of US shale oil production by basin.
Oil prices determine the economics of US shale oil, hence this data-file captures shale oil production costs, broken down across IP rates, capex costs, lease operating expenses (LOEs), processing and transportation (P&T), royalties, general, administrative and other expenses (G&A).
We have drawn top-down numbers for our shale modeling from the public disclosures of leading US shale producers, including pure-plays such as Diamondback and Permian Resources, and other Permian-focused E&Ps that have subsequently been acquired by Energy Majors.
Capex costs are also broken down on a bottom-up basis, across 18 components (chart below), capturing variables such as rig rates, frac crew costs, diesel prices, sand prices, water, tubular steel prices, cement prices and other more niche services.
Stress-testing the model. You can flex input assumptions in the ‘NPV’ and ‘CostBuildUp’ tabs of the model, in order to assess economic consequences. Our own conclusions from this modeling work are that US shale economics can still support flat production at around $60/bbl, material declines below $50/bbl, and strong growth above $70/bbl.
For a similar model of shale gas economics, please see our model here. The model was originally published in 2020, has been repeatedly updated, and was last updated in September-2025. Our broader hydrocarbon research spans across oil, gas, LNG and chemicals.