HoppieBarrels of oil equivalent relates to heating value, not...

Hoppie

Barrels of oil equivalent relates to heating value, not economic value. On an energy equivalent basis, gas is much cheaper than oil, so you need to break it out into the oil and gas components.

1 bbl oil = 6.287 MMBTU

$80 / bbl oil divided by 1 bbl / 6 mscf = $13 / mscf (too optimistic) equivalent or alternatively, $5 / mscf gas multiplied by 6 mscf / 1 bbl = $30 boe (too pessimistic).

I guess TEX's producing roughly 40% oil / 60% gas...

Cheers
Norton