How A $200,000 Well Could Drastically Change The Oil Industry

16 Jun 2017   Shale Oil

Technological upheavals in the oil sector will make it possible for mini-producers to market crude profitably, creating new competition for bloated fossil fuel companies accustomed to benefitting from their largesse. It takes serious cash to start an oil and gas exploration company the traditional way. A single well in the Permian Basin – recognized as the most cost-effective drilling area as barrel prices recover enough to support new rigs – currently costs between $5 million to $9.3 million to operate, depending on the well’s depth. And while logistical tricks and fracking R&D allow oil and gas companies to stretch the productive lifespan of their wells, those efforts only add to the sites’ operational costs. Average estimated costs for wells—as of 2015—in the Marcellus ($6.1 million), Bakken ($5.9 million) and Eagle Ford ($6.5 million) formations are just as pricey, because the economies of scale model has dominated the oil sector […]

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