RE: RE: EROEI ... and other matters Resource Plays and how companies choose to drill them have little to do with economics... it has everything to do with the acquisition of mineral rights... the majority of Mineral leases (in the US) are subject to a 3 year primary term... If you don't drill the lease expires... IN Alberta... the time frame is 3-5 years depending on the region... a dramatic example of what can happen can be found in Shell's acquisition of Oil sands licenses acquired in 2007-2008... the total price was in the neighborhood of $400MM... Shell eventually "wrote off" those exploration licenses... essentially allowing them to expire...So... it has been on the corner of Rock Avenue and Hard Place Street where most US companies found themselves... they (like Chesapeake, EnCana et al) had to drill or wrirte of hundreds of millions in acquisition costs and let those lands go to the competitors who didn't blow their wad on Land in the early rush...even now... it's produce or loose and regardless of whether they do produce they are obligated to pay millions in shut in payments (in the US.) making "carrying costs" that much more expensive...
OIL and gas as an investment demands that shareholders do NOT stare at a share price day in and day out... economics and planning are set in 5-10 year increments with adjustments to those plans made as the news of the world unfolds... top companys are proactive... attempting to base investment reactively only leads to losses...
do as you choose with that information... as always it's just my opinion...GLTA