RE:Break Even Cost Per barrel?the answer is not very simple as there are too many assumptions that are never disclosed to the public made to caclulate that price .
Heres a formula from Perplexity.
Oil companies calculate breakeven prices through a complex process that takes into account various costs associated with oil production. Here are the key components and methodologies involved in determining these prices: Key Components of Breakeven Price Calculation
- Production Costs: This includes direct costs associated with extracting oil, such as drilling and completion expenses. However, it does not encompass all costs, such as taxes, investments, exploration expenses, and transportation costs, which are critical for a comprehensive breakeven analysis.
- Capital Expenditures (CAPEX): These are the initial investments required for drilling and developing new wells. The breakeven price must cover these costs to ensure the company can sustain operations and invest in future projects.
- Operating Expenditures (OPEX): These are ongoing costs required to maintain production, including labor, maintenance, and materials. OPEX is crucial for calculating the net cash flow from oil production.
- Revenue Projections: Companies estimate potential revenue based on projected oil prices and production rates. This involves analyzing market conditions and historical price trends to forecast future oil prices.
- Profit Margin Considerations: Some breakeven analyses include a profit margin, which can range from 10% to 30% above the calculated costs. This margin reflects the company's desired return on investment