What does it cost the operator/producer to extract a barrel of oil equivalent (BOE extraction cost) from the Bakken?
I have refrained from talking about the BOE extraction cost because I think the numbers can be manipulated even more than the IPs. However, more and more folks are asking that question, and I will start posting some numbers as I see them. I doubt I will go looking for them. For me, it’s not worth the effort. BEXP and WLL have been particularly forthcoming with their estimates of their BOE extracton cost in their corporate presentations which are easy to access at their home page. I was unable to find comparable reporting by EOG. In general, in 2009, the number I saw most frequently was $12 – $14 to extract a barrel of oil from the Bakken. In WLL’s June, 2010, corporate presentation, WLL stated the cost was $10/bbl. On page 5 of the 4Q, 2010, Hess earnings conference call, Hess said “the Bakken is robust at $40. It returns the cost of capital at $40.
