economics · reserve metrics
F&D Cost
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Inputs
$
BOE
Description
Computes finding and development (F&D) cost — total exploration and development spending divided by the reserves it added, on a $/BOE basis — the standard industry metric for how efficiently capital converts into booked reserves. Feeds directly into recycle_ratio alongside netback.
Variables
| Symbol | Unit | Description |
|---|---|---|
| F&D | $/BOE | F&D Cost |
| CAPEX | $ | Total exploration and development capital spent over the period being evaluated — drilling, completion, and facilities, the same up-front capital concept breakeven_eur's CAPEX input represents. |
| ΔReserves | BOE | Net proved reserve additions (discoveries, extensions, and revisions, excluding price-driven revisions per standard industry convention) attributable to the same period's spending, on a barrel-of-oil-equivalent basis. Supplied directly — this calculator does not blend oil and gas volumes into BOE itself. |
Assumptions
- Net reserves added is supplied directly by the user, on a BOE basis (oil and gas already blended) — this calculator performs no oil-to-gas BOE conversion of its own.
- CAPEX and reserves added are measured over the same period and reserve-addition category (see limitations).
Limitations
- Excludes future capital required to develop already-booked proved undeveloped reserves — standard industry practice for this metric, but it means F&D cost alone does not capture the full capital intensity of a reserves base that is heavily weighted toward undeveloped locations.
- 'Basic' F&D cost (discoveries/extensions/non-price revisions) and 'all-in' F&D cost (also including acquisitions and improved recovery) are genuinely different, both standard, conventions — this calculator computes the ratio generically from whatever CAPEX/reserves figures are entered; it does not itself classify which convention applies.
- A single-period F&D cost can be volatile and unrepresentative — multi-year trailing averages are standard industry practice for smoothing lumpy reserve-booking years, which this calculator does not compute automatically.
Use Cases
- → Capital efficiency benchmarking: Compare how efficiently different operators, basins, or time periods convert capital spending into booked reserves.
- → Recycle ratio input: Feed this result into recycle_ratio alongside a realized netback figure to assess whether reserve-replacement spending is being recovered profitably.
Related Calculations
Region Notes
General
F&D cost benchmarks vary enormously by basin, well type (conventional vs. unconventional), and commodity mix — compare against peer operators and the same reserve-addition convention rather than a single industry-wide number.
References
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