Costs and profit margins of small field production (Focus on Energy 2017)

The figure below is from Focus on Energy 2017. It shows costs and profits that are associated with exploration and production from small fields on- and offshore the Netherlands (100%). There is a strong correlation between gas price and profit margin. Based on the current gas price development and an expected decrease in production costs, profit margins are expected to recover in 2017.

Small fields refer to all the gas fields in the Netherlands except for the Groningen field. Finding costs are largely based on expenditures on geology and geophysics (e.g. seismic surveys and dry exploration wells). Production costs are the operating costs. Depreciation is shown on a unit-of-production basis, including depreciation over successful exploration wells that have been capitalised in the balance sheet and excluding any accelerated depreciation.

For more information about the Dutch energy sector download our publication Focus on Energy 2017 below.