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Hostile Areas...

The gold areas of the OF Map are considered hostile. You can call this area H2S, offshore, poor infrastructure, whatever you like.

The hostile area requires more capital to develop. While the geology in the hostile area is the same as the geology of the conventional oil, the economics are different. 

The bold figures in the table below summarize the economic parameters of the hostile areas. 

Depth Basic Drilling Cost

See also:

Drilling Contractor's Fees &

Rig Moves

 Time of Drilling Initial Cash Flow
Shallow $500,000 6 OF Days $60,000
Intermediate $700,000 7 OF Days $35,000
Deep $1,000,000 8 OF Days $105,000

All wells decline similarly to the conventional oil field. See Depletion to see the decline rate for hostile areas.

 

 

Drilling the Hostile Area . . .

. . . not only requires more capital and has greater rewards, it has significantly different economics than conventional oil. A thorough financial analysis is warranted to properly compare both areas.   

 

 

 

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