Competitive Framework for Alaska: 2012

Terms for Shale Oil The Shale Oil terms could be the same as the terms for ultra heavy oil. However, there is a small probability that the shale oil operations may turn out to be rather profitable if fracking operations are very successful and primarily light oil is being produced. So, it is possible to make the allowance of 20% more flexible and reduce the percentage in case shale oil production proves to be rather profitable. This can be done with a so-called R-factor. The 20% could be reduced if the ratio between cumulative revenues and cumulative costs for a project become very profitable. 94

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