Solomon Applications

Upstream New Projects OpEx Estimator

Predict Accurate Future OpEx Cost for New Upstream Projects

You and your company want to pursue a major field development project. However, you need confidence in your projected operating costs (OpEx) before you decide to move forward.

Solomon’s Upstream New Projects OpEx Estimator (an OpEx estimation tool for new upstream projects), can help you generate accurate OpEx cost estimates for your proposed project. The tool leverages proprietary, normalized, and non-public data from 5,000 fields worldwide.

OpEx can account for roughly 50% of the cost of producing a barrel of oil. However, OpEx is more difficult to assess than capital expenditures (CapEx) because it is spread out over a number of years and is based on many assumptions. As fields and infrastructure mature, the maintenance costs also can rise higher than initial estimates.

Today, oil and gas companies face pressure to develop new resources while keeping costs low. The rise in OpEx costs in the past decade, coupled with the 2014 oil price downturn, has forced companies to rein in costs to maintain profitability at lower oil prices. Solomon’s online multi-user OpEx tool can quickly and accurately predict OpEx and net present value for a new project.

How the OpEx Tool Works

To calculate future OpEx cost, you simply download a Microsoft Excel file, enter data into that file, and then upload the data to the tool. The tool then calculates operational lifecycle OpEx using Solomon’s comparative performance analysis (CPA) methodology and information from Solomon’s massive, proprietary Upstream Study database.

Normalized Cost Categories:

Normalized Cost Categories Table

Peer Comparisons used in Normalization:

Peer Comparisons Used In Normalization

Trust Solomon’s Data and Insight

Over the last 30+ years, Solomon has conducted production operation benchmarking for a broad range of operators, in a variety of departments (operations, finance, corporate planning), using its unique and trusted CPA methodology. The data gathered through this benchmarking process contains insight into more than 5,000 fields worldwide and is available through Solomon’s proprietary Upstream Study database.

Success Stories from our Clients

  • A global operator uses the tool to estimate OpEx lifecycle for business opportunities worldwide, at every stage of project development (conceptual, FEED, construction)
  • A national oil company utilizes the tool as an input to maximize its portfolio of investments and assess its field’s economic limit
  • A coal-bed methane producer uses the tool to quantify the impact of its aggressive growth plan for future OpEx needs
  • An offshore operator utilizes the tool to estimate how changes in its gathering strategy would impact future cost allocation by field
  • An independent producer uses the tool to establish a medium-term “unit operating cost per barrel” target based on sharp increases to produced water level

Start optimizing your project’s cost structure and decisions now. Request a demo.