Full Supply Costs For Montney Producers Drop 13 Per Cent In 2017
The full supply costs1 of producing gas and liquids in Canada’s Montney formation is 13 per cent lower this year at C$18.79, according to a new study from the DOB and CanOils that focuses on Montney and Marcellus producers in Q2 2017.
Source: Montney vs. Marcellus Cost Benchmarking Study, Q2 2017 – download here
The study, which looks in detail at the average costs of nine Toronto-listed companies, illustrates that cuts in three-year average finding and development costs (F&D) and interest expenses per boe are the key drivers behind the falling costs. These decreasing costs are offset slightly by a combined 12 per cent increase in operating and transportation expenses.
To find out how these nine Montney producers compared to seven producers in the more gas-heavy Marcellus shale in the Appalachian basin, download our benchmarking study at this link.
1) Throughout the study, “full supply costs” are the sum of:
- Operating expenses per boe
- Transportation expenses per boe
- 3 Year Average F&D expenses per boe
- Interest expenses per boe
- General and administration expenses per boe
2) Full supply costs would usually include royalty expenses per boe, but as the key premise of the study is to benchmark costs between U.S. and Canadian producers, royalty expenses had to be excluded; the figure is not reported by U.S. companies, who instead include the figure within their revenue totals.