The cost involved in drilling a well in the Eagle Ford shale has soared from approximately $5.3 million to as much as $10 million, according to an expert in exploration and production. This is one of the limitations on growth in the play that has been identified by industry insiders, the Houston Chronicle reports.
Michael Hall, a director and senior analyst for exploration and production research at the financial-services firm Robert W. Baird, said that some of the higher costs are due to the increased number of hydraulic fractures being done per well, which also increases production.
In the summer, a Rigzone survey found that operators in the Eagle Ford play said the costs for drilling ranged from $5.5 million to $9.5 million. The news source attributed this wide variation not just to the amount of fracs per well but also to the wells' depths, lateral length and the number of laterals.
According to Rigzone, the most expensive aspect of the drilling and completion of a well is fracking, or formation stimulation, which accounts for about $2.76 million of the typical Eagle Ford well budget.