This section provides an overview for supply cost:
The supply cost for a resource project can be defined as the minimum constant dollar price required to recover all capital expenditures, operating costs, royalties, and taxes, as well as to earn a specified return on investment. The supply cost calculation determines a value received per unit of production. As such, supply costs serve as an indicator of a project’s economic viability.
Natural gas supply costs are calculated by PSAC area for conventional natural gas and by type for unconventional gas. Further analysis is given for well type and by processing requirements.