The aggregate fully loaded finding and development (F&D) cost for a study group of 12 major integrated international oil companies and 60 US independent companies increased considerably in 2004 over 2003, reported Banc of America Securities (BAS) in a report released April 18. Responsible for these increases, BAS said, was a sharp escalation in acquisition and service costs, coupled with fewer added reserves and net negative reserve revisions.

The integrated companies' fully loaded F&D cost rose to an all-time high of $9.55/boe in 2004 from $7/boe in 2003, a jump "primarily driven by a 50% drop in proven reserves added per successful well in the US and net negative reserve revisions," BAS reported. The group's 10-year average is $5.15/boe.

The integrateds' 2004 F&D cost is slightly below the aggregate $9.65/boe all-time high of the independents, which experienced a 20% increase over their aggregate $7.95/boe 2003 posting.