Soaring Shale Costs Boost Case for Deal-Making, Kimmeridge Says
- Finding and development costs rose 70% to $17 a barrel in 2023
- Industry worries ‘shale is getting old,’ report says
Pumpjacks operate on oil wells in the Permian Basin in Crane, Texas.
Photographer: Daniel Acker/BloombergThis article is for subscribers only.
More consolidation in the US shale sector is needed to cope with soaring costs to identify and exploit untapped oil reserves, according to Kimmeridge Energy Management Co.
So-called finding and development costs surged 70% to $17 a barrel last year after doubling in 2022, Kimmeridge wrote in a white paper on Monday. Finding and development costs are among the first expenses incurred by management teams and typically involve things such as seismic surveys and drilling test wells to confirm a discovery.