Estimating the impact of royalty relief on oil and gas production on marginal state leases in the US

摘要: Abstract An emerging challenge for several energy-producing states will be the development of policies that encourage continued economic maturing oil and gas properties. Production rates naturally decline as wells age. This is particularly true properties approaching “marginal” status in many where operation under expected conditions becomes questionable. Premature shut-in these may entail loss production, output, employment, state revenues. paper examines potential impact royalty relief on leases production using Louisiana a case study. Two related measures are estimated: (1) current position relative to age property (2) costs given at or anticipated level output. Those wells/leases estimated having negative profitability (i.e., losses) operating break-even levels candidates classification. The number associated with marginal then estimated. impacts offering 25% considered. Under scenario, minimal amount increased revenues realized by discount provides only incremental from total production.