How Much Does it Cost to Drill a Single Marcellus Well? $7.6M

A new 92-page study just released by the University of Pittsburgh (copy embedded below) takes a realistic look at the direct costs, and economic impacts, of drilling a single Marcellus Shale gas well. The study, called the “Economic Impact of the Value Chain of a Marcellus Shale Well,” looked in depth at an EQT-drilled well in Washington County, PA. Undergraduate and graduate students from Pitt found that a single well had direct costs of more than $7.6 million. Or think of it this way: More than $7.6 million is invested in a local community, on average, for each and every well drilled.

The costs to drill a well break down this way:

• Land acquisition and leasing: $2.1 million
• Permitting: $10,000
• Vertical drilling: $663,000
• Horizontal drilling: $1.2 million
• Hydraulic fracturing: $2.5 million
• Completion: $200,000
• Production to gathering: $472,000

In addition to providing a realistic picture of the direct costs associated with natural gas drilling, the study also provides a brief introduction to the Marcellus Shale industry and looks at the different types of economic impact (direct, indirect and induced).