Gas Business Briefing
IRR Highest in Granite Wash, Bentek Says

Friday, June 24, 2011

Oil and natural gas producers looking for the best internal rate of return among domestic plays, remember three words: Granite Wash Wet, according to Bentek Energy LLC analysis.

Granite Wash offers producers a whopping 203% IRR, based on $4/MMBtu gas and $54/Bbl natural gas liquids, says Bentek's Catherine Bernardo.

"The impact of liquids and oil on breakevens is that we can no longer value NGLs and oil based on a price relationship with gas," Bernardo says.

The energy analyst provided IRRs for many of the country's dry and wet gas, and oil plays to her audience, including Gas Business Briefing, during her presentation at Bentek's recent Benposium symposium, in Houston.

In its IRR analyses, Bentek's price assumption for gas is the 12-month forward average curve for each regional pricing point.

For NGLs, Bentek uses the current Mt Belvieu prices and the average composition of a typical barrel of NGLs; the weighted average in dollars/Bbl of NGLs.

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