How rising well costs are reshaping the oil patch - The Globe and Mail
http://www.theglobeandmail.com/...ort-on-business/industry-news/energy-and-resources/how-rising-well-costs-are-reshaping-the-oil-patch/article4491408/
What’s the biggest generational shift in the oil and gas industry?
Don’t feel bad if you guessed either hydraulic fracturing, horizontal drilling or drilling multiple wells from the same location (pad drilling). Asian investment or rising production from the oil sands would be impressive choices. However, the answer lies where the bit hits the ground hardest - the capital cost of drilling a well.
A well in western Canada today, on average, costs three times as much to drill and complete as it did six years ago (see attached Figure 1). The big ramp up in the transition period between 2004 and 2010 – from $1.3-million to $3.6-million per well – was not because of general inflation, but the quick migration into the capital-intense world of unconventional plays like shale gas and light, tight oil (LTO).