Is it time to sell some assets?, page-23

Example :

Eagle Ford Shale wells are producing roughly 500 barrels per day of oil on average by some estimates.

Given the widely cited 70% decline rate over the first year of production in a new well, and an $8 million well cost, that makes the extraction cost roughly $40-50 per barrel of oil produced.

If refracking a well allows a recovery of even half the amount of oil as the original well, then the price per barrel extracted falls to $20 per barrel.

In the current price environment, and with the big servicers willing to take on the initial production risks, that business model makes tremendous sense.


http://oilprice.com/Energy/Crude-Oil/The-Latest-Business-Model-That-Could-Save-Fracking.html