Drilling economics

From Wikimarcellus

Marcellus shale drilling economics are favorable with costs below $4/Mmbtu. Economics are also favorable due to premium pricing as well as generally lower royalties paid than in other plays. In the northeastern part of the Marcellus play a well is expected to produce over its lifetime between 3 and 6 Bcfe (EUR) and cost $3.5 to $4.0 million to drill and complete. In the southwestern part of the play, cost runs approximately $3.5 million with EURs of 3 to 4.5 Bcfe. Direct finding and development costs ("F&D") run approximately $0.75 to $1.00 per Mmdfe in both sections of the play.

Drill-bit break-even prices could run as low as $2.70-3.60/Mmbtu in the Marcellus with a full-cycle break-even between approximately $4 to $5/Mmbtu. Longer laterals, pad drilling and other learning curve efficiencies should help improve the economics over time.