"Lifecycle Shale Economics: Where Instincts End and Analysis Begins"

Robert Clarke
Research Director, Lower 48 Upstream - Wood Mackenzie

Shale projects can have a certain stigma around them and we're certainly seeing that in the public markets today. Over a decade into the US shale boom, many investors doubt the value proposition. The recurrent question is whether operators can truly generate acceptable full-cycle returns when every single cost is accounted for. Wood Mackenzie studied a number of historic shale projects in their entirety to help answer the question.

Our analysis reveals that on average, the prominent shale projects that sold over the past few years did not create material value for the original operator.

• The best performing full-cycle shale projects were ones where the operator either entered a play early or held existing acreage in the basin.

• Bringing in JV partners to carry costs helped returns, but did not always guarantee commercial success.

• Entering the play when it was already transitioning to an aggressive growth phase resulted in full-cycle value destruction.



Robert Clarke has been with Wood Mackenzie since 2005, originally as a member of the company’s initial US Lower 48 Upstream Research group in Houston. He has covered numerous US regions and led much of Wood Mackenzie’s early US onshore, shale gas, and tight oil research.

He managed the company’s international shale, CBM, and tight gas research from 2009 to 2014 and has widespread experience benchmarking and valuing exploratory global unconventional assets. Over this period, he worked extensively with NOCs and governments. He relocated to Dallas in 2015 and now works closely with domestic E&Ps, investors, and service companies specific to North Texas.

Robert specialises in geologic play description, portfolio valuation, production forecasting, analogue modelling, and sector trend analysis. He has worked on upstream consulting projects, ranging from asset opportunity screenings for the majors, to due diligence work for private equity-led M&A. Robert regularly contributes his research conclusions to written media and is a frequent speaker and panel moderator at industry conferences.

Prior to joining Wood Mackenzie, he worked as a Field Geologist for a private engineering and consulting firm in Houston, Texas. Robert graduated Cum Laude from Texas A&M University in 2001 with a BA in Geology, and received a MBA in 2005 from the Eller College of Management at the University of Arizona.