Current Unconventional-Resource A&D Price Metrics

While unconventional-resource plays remain stalwarts of potential across the onshore U.S., sticker prices are falling-as is the case for any oil and gas asset today-but may be affected more due to the lease-expiration nature of the nascent plays and the financially distressed situation of some players. What's it cost now to enter or expand in each play?

U.S. PDPs was priced a year ago at PV 6-10 and PUDs at PV 12-20, and buyers were paying for probable and possible reserves. Today, PDP is 12-15; PUDs, 18-25, if it will be sold at all.

Proved reserves were selling for some $3.50/Mcf and $20,000 per flowing BOE a year ago; today, those assets fetch less than $1.50 and $10,000.

What's next? There is a large bid/ask spread currently. Buyers are being patient, arguing for lower valuations, reluctant to enter new basins/plays and to pay for upside; cash is increasing in value; and financing is difficult. Expect consolidation.

Featuring:

• Ward Polzin, Managing Director - A&D, Tudor, Pickering, Holt & Co. LLC

Total Length: 00:22:12

Included: Videos, Slides