A Community Conversation on Natural Gas

Over the past few months, the Marcellus Shale Coalition asked Pennsylvanians their questions about natural gas development.
This website will answer those questions straightforwardly and honestly.

Q: What is the estimated capital investment?

The safe, job-creating development of clean-burning American natural gas from the Marcellus Shale is without question a capital intensive undertaking. According to researchers at the University of Pittsburgh’s Katz School of Business, the estimated total cost of a Marcellus Shale well is $7,651,825. Well costs – which can range from $5-7 million – vary due to a host of factors, including formation depth, length of the laterals, wells per pad, as well as the amount of fracturing stages per well, among others. Here is the University’s per-well breakdown:

 

Feature   Description

 
ACQUISITION & LEASING

$2,191,125

PERMITTING

$10,075

SITE PREPARATION

$400,000

VERTICAL DRILLING

HORIZONTAL DRILLING

$663,275

$1,214,850

FRACTURING

$2,500,000

COMPLETION

$200,000

PRODUCTION TO GATHERING

$472,500

 

Total   $7,651,825

 

And according to Penn State University researchers, the entire natural gas production process taken together — including lease & bonus, exploration, upstream, midstream, pipeline & processing, royalties and other associated costs — in Pennsylvania during 2010 was $11.5 billion. Based on industry data, Penn State researchers determined that natural gas companies were on track to increase their investment spending to $12.7 in 2011 and to over $14.6 billion in 2012.

 

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