Calculators
Break-even Oil Price Calculator
Calculate the oil price at which a well or field breaks even, from operating costs, royalties, taxes, transport and capital recovery.
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The tool
Enter your numbers below. Results update as you type, and nothing leaves your browser.
Everything you enter stays on your own machine. Nothing is sent to us or to anyone else, which you can confirm in your browser network tab.
What people use it for
- Screening drilling prospects
- Explaining break-evens to investors
- Comparing basins and plays
- Hedging decisions
About this tool
What the Break-even Oil Price Calculator does
A well breaks even when the oil price covers its costs per barrel: operating costs, transport, the revenue share paid as royalties and production taxes, and recovery of the capital spent to drill and complete it. This calculator converts each into a per-barrel figure.
Formula
- Capital per barrel = capex ÷ recoverable barrels × (1 + required return)
- Costs per barrel = capital + operating + transport
- Break-even price = costs ÷ (1 − royalty − production taxes)
Worked example
Using the starting values in the calculator above:
| Input | Value |
|---|---|
| Drilling and completion cost | $7,500,000 |
| Estimated ultimate recovery | 450,000 barrels |
| Operating cost per barrel | $12.00 |
| Transport and differential per barrel | $4.00 |
| Royalty burden | 20% |
| Severance and production taxes | 7% |
| Required return on capital | 10% |
| Current oil price | $70.00 |
| Result | Value |
|---|---|
| Full-cycle break-even price | $47.03 |
| Margin at current price | $22.97 |
| Operating break-even (no capital) | $21.92 |
| Capital recovery per barrel | $18.33 |
How to read the result
Operating break-even tells you when to shut in existing production; full-cycle break-even tells you whether to drill new wells.
A proper economic evaluation discounts cash flows over the decline curve; this per-barrel method is a quick screen.
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Questions
Questions about this tool
The things clients actually want to know — costs, timelines, ownership and what happens after launch.
The price per barrel at which revenue covers all costs, including capital, for a well or project.
Estimated ultimate recovery: the total oil a well is expected to produce over its life.
They take a share of revenue, so the price must rise to cover costs from the remaining share.
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