Figure 2: The chart above shows an estimate in development of cumulative net cash flows post CAPEX for manufacturing LTO wells in Bakken (ND) as of January 2009 and as of March 2015 (red area and rh scale) and estimated monthly net cash flows post CAPEX (black columns and lh scale). The assumptions for the chart are WTI oil price (realized price which is netted back to the wellhead), average well costs starting at $8 Million in January 2009 and growing to $10 Million as of January 2011 and $9 Million as of January 2013 with a decline towards $8 Million as from January 2015. All costs assumed to incur as the wells were reported starting to flow (this creates some backlog for cumulative costs as these are incurred continuously during the manufacturing of the wells) and the estimates do not include costs of non- flowing and dry wells, water disposal wells, exploration wells, seismic surveys, acreage acquisitions etc. Economic assumptions; royalties of 16%, production tax of 5%, an extraction tax of 6.5%, OPEX at $5/Bbl, transport (from wellhead to refinery) $12/Bbl and a weighted interest of 6% on debt (before any corporate tax effects, which now adds around $3/Bbl in financial costs) and income from natural gas/NGPL sales (which now and on average grosses around 1.3 Mcf/Bbl). Estimates do not include the effects of hedging, dividend payouts and retained earnings. Estimates do not include investments in processing/transport facilities and externalities like road upkeep, etc. The purpose with the estimates presented in the chart is to present an approximation of net cash flows and development in total use of primarily debt for manufacturing of LTO wells. The chart serves as a proxy for estimates of the aggregate cash flow for all oil companies in Bakken(ND).
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