What is the cost of production of natural gas?

Question

What is the cost of production of natural gas?

Answer 1

These are rough numbers.

The average cost of finding and developing a gas reserve last yr was around $3 per mmbtu. Average operating costs were probably around $1 per mmbtu (excl taxes).  So the cost of production is around $4.  However, to earn a return on your investment, you probably need to make 1.5-2x that number.

Answer 2

Depends on the environment this natural gas is being extracted from, i.e. it costs more in harsh areas than it does in less harsh areas but lets assume that its in a nice area where people don't get kidnapped at gun point and held at ransom.

First we need to discover a prospect, I estimate approx £16,000,000

Then we need a platform which if we average it will be in the region of £200,000,000

Then we need people and equipment £3,000,000 per year

So before we even start we have spent £209,000,000 but that again is assuming that we are drilling and planting a small new platform in the UK north sea.

Each area of the world cost differing amounts of money, depends on how easy the oil/gas comes out, the special equipment you may need, political climate of the area etc.