economics · reserve metrics
Breakeven EUR
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Inputs
$
$
$/STB
fraction
Description
Computes the cumulative volume (EUR) that must be recovered for total net revenue to equal total project cost — a genuinely different question from economic_limit_rate's instantaneous rate-based break-even, extending the same underlying break-even logic to lifecycle cost and cumulative volume instead of an annualized cost and a daily rate. Deliberately a simplified, undiscounted, decline-shape-agnostic static breakeven, not a full economic model — see limitations before relying on a result from it.
Variables
| Symbol | Unit | Description |
|---|---|---|
| EUR_be | STB | Breakeven EUR |
| CAPEX | $ | Total up-front capital cost (drilling, completion, facilities) — the one-time cost economic_limit_rate has no way to represent, since it only ever models an annualized operating cost. |
| OpEx | $ | Total lease operating expense expected over the well's full producing life, supplied directly as a single lump sum — not derived from an annual LOE figure and an assumed well life, since that would require assuming a production schedule this calculator deliberately avoids (see limitations). Enter 0 to evaluate a CAPEX-only break-even. |
| P | $/STB | Wellhead (netback) oil price used to value production — same convention as economic_limit_rate. |
| NRI | fraction | Net revenue interest applied to production revenue — see the Net Revenue Interest calculator to derive this from working interest and royalty burden. |
Assumptions
- Total Operating Cost is supplied directly as a single lifetime lump sum, not derived from an annual LOE and an assumed well life.
- Oil price and NRI are held constant across the well's full producing life — no price escalation or NRI change over time is modeled.
- Pre-tax: no severance or ad valorem tax is deducted from revenue before comparing to total cost.
- Single-stream (oil) economics — associated gas/NGL revenue is not included unless folded into the price or cost inputs by the user.
- No time value of money is applied — every dollar of cost or revenue is weighted equally regardless of when it actually occurs, an intentional simplification stated here explicitly rather than left implicit.
Limitations
- This is an undiscounted, static breakeven — money spent or recovered in year 1 and year 10 are weighted exactly the same, the identical simplification payback_period's simple_payback output makes for time. For a genuinely time-value-aware breakeven, project a year-by-year cash flow and use npv_cashflow_variable to find where NPV crosses zero instead of relying on this shortcut.
- Does not assume any production decline schedule or timing — it only answers how much cumulative volume must be recovered in total, not how many years that takes or whether the well can physically produce fast enough for the answer to be economically relevant. Pair with Reservoir's eur_from_decline to check whether an actual decline-curve-estimated EUR clears this threshold.
- Total Operating Cost must be supplied directly as a single lifetime figure — this calculator does not derive it from an annual LOE and an assumed well life, since doing so would require assuming the very production schedule this tool intentionally avoids.
Use Cases
- → Quick project screening: Before building a full cash-flow model, sanity-check whether a play's expected EUR range plausibly clears total project cost at current price.
- → Compare against decline-curve EUR: Feed this result alongside Reservoir's eur_from_decline output to see whether a well's actual estimated ultimate recovery is above or below the volume needed to break even.
Related Calculations
Region Notes
General
Break-even EUR is price-sensitive by definition — the same project can swing from economic to uneconomic and back as oil price moves through a normal commodity cycle; treat this as a point-in-time result, not a permanent classification of the project.
References
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