Economic Impact | Energy Companies | EQT Corp | Industrywide Issues | Pennsylvania | Statewide PA | Washington County
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:
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In March 2010, CONSOL Energy (Cecil, PA) paid Dominion Resources $3.5 billion for 500,000 acres of Marcellus Shale gas leases, instantly tripling their lease holdings. Since that time, CONSOL has continued to invest in Marcellus acreage and they now have 750,000 acres under lease. But CONSOL had a problem: Not enough money to develop their vast Marcellus acreage. So they did what is now a common practice—they found a partner to invest. Yesterday, CONSOL and Noble Energy (Houston, TX) announced that Noble will buy a 50 percent interest in 663,350 net undeveloped acres and fund drilling and completion costs in a deal worth $3.4 billion over an eight-year period.