Soaring Shale Costs Boost Case for Deal-Making, Kimmeridge Says

More consolidation in the US shale sector is needed to cope with soaring costs to identify and exploit untapped oil reserves, according to Kimmeridge Energy Management Co.

So-called finding and development costs surged 70% to $17 a barrel last year after doubling in 2022, Kimmeridge wrote in a white paper on Monday. Finding and development costs are among the first expenses incurred by management teams and typically involve things such as seismic surveys and drilling test wells to confirm a discovery.

More than a decade into the shale revolution, which upended global energy markets, F&D costs are climbing in large ...