The economic limit of an oil and gas asset occurs when income from production is less than the direct cost of operation. Economic limits determine the threshold for profitable operations and are often considered from a conceptual perspective rather than as an object for empirical assessment. The purpose of this paper is to derive empirical estimates of the economic limit of offshore structures in the Outer Continental Shelf Gulf of Mexico. We classify 1962 decommissioned structures between 1986-2009 by structure type, primary production, water depth and year of removal, and compute end-of-life production, adjusted gross revenue, and water cut thresholds according to various levels of categorization. During the last year of production, [...]
