An acceptable internal rate of return (IRR) of 20% is required on average for further development of a field. Anything less than this, and the field becomes questionable.
Oil wells with 0-10% IRRs are likely to be uneconomic after corporate expenses and interest charges.
Now, it’s an entirely different landscape if you use $75 oil vs. $45 oil per barrel. At $45 oil per barrel, there are currently just over 400 wells that have a 30 day initial production (IP) rate at over 900 bopd and clear the 20% after-tax IRR ( internal-rate-of-return) hurdle in the North Dakota Bakken.
There are 5,400 wells drilled in the Bakken with 30-day IP (initial-production) rates at or greater than 300 bopd, which means roughly 7.5% of the wells drilled meet the after-tax IRR threshold.
www.caseyresearch.com/cdd/...-the-bakken-a-mathematicians-take