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Bagging An Elephant, 8 Years In The Making, page-13

  1. 563 Posts.
    What my model tells me and should be intuitively obvious is the contractor barrel margin is dependent on the crude price and flow rate.
    Leaving at 100,000 BPD
    $40 crude price (according to my spreadsheet which is not guaranteed to be accurate) a barrel is worth ~ $6.40 to the contractor. At $80 it is ~ $17.50

    So if you are trying to figure out what a T/O barrel price might be among the main factors are quality, recoverable resource and potential flow rate(s). I think current crude prices can be largely ignored because any commercial development is going to have a 10 year plus life.
 
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