U.S. drilling costs set 5 year high in 1996

Operators spent $10.9 billion to drill and equip oil and gas wells in the U.S. in 1996, the American Petroleum Institute reported. The 1996 Joint Association Survey on Drilling Costs said the $10.919 billion was up 3.6% from 1995 and was the highest since 1991. The number of wells, 20,000 ft deep or more, nearly tripled from 1995 to 25 wells. The survey indicated that U.S. operators drilled 22,009 wells in 1996, up 7.2% on the year. The number of oil wells increased 5.6% to 8,180, gas wells

Feb. 2, 1998

3 min read

Operators spent $10.9 billion to drill and equip oil and gas wells in the U.S. in 1996, the American Petroleum Institute reported.

The 1996 Joint Association Survey on Drilling Costs said the $10.919 billion was up 3.6% from 1995 and was the highest since 1991.

The number of wells, 20,000 ft deep or more, nearly tripled from 1995 to 25 wells.

The survey indicated that U.S. operators drilled 22,009 wells in 1996, up 7.2% on the year. The number of oil wells increased 5.6% to 8,180, gas wells 10.4% to 8,684, and dry holes 4.6% to 5,145. Total footage drilled was up 1.6% at 122,798,000 ft.

Expenditures totaled $2.8 billion for oil wells, $5.3 billion for gas, and $2.8 billion for dry holes. Oil completions averaged $341,000/ well, gas wells $616,000, and dry holes $541,000. Oil wells averaged $70.60/ft, gas wells $98.67, and dry holes $95.74.

The table [11,994 bytes] on p. 71 shows 1996 vs. 1995 costs for a selection of states and depth ranges. The full 98 page report is available from API in Washington, D.C.

Horizontal drilling

The survey indicated that operators completed 1,108 horizontal wells, down 6% from 1995. Total footage of all horizontal wells was 8,010,270 ft, down 39%.

Horizontal drilling expenditures totaled $1.1 billion, down 21% from 1995

Costs per foot averaged $137/ft for horizontal wells vs. $86/ft for wells not drilling horizontally.

Footage drilled averaged 7,229 ft per horizontal well compared with 5,492 ft for wells not drilled horizontally.

About 29% of the horizontal wells drilled in 1996 were gas wells. The average footage drilled for the 319 horizontal gas wells was 9,215 ft for an average cost of $199/ft.

The average footage drilled for horizontal oil wells was 6,258 ft at an average of $98/ft. The corresponding figures for oil wells not drilled horizontally were 4,967 ft and $76/ft.

Coalbed methane

Operators drilled 310 coal methane gas wells in 1996, totaling 502,021 ft and costing $31.8 million.

The average estimated cost for each coalbed meth- ane well was $102,535, or $63/ft. Average footage was 1,619 ft.

API said 99.4% of all 1996 coalbed methane wells were 100-5,000 ft deep.

The average cost per foot was $63/ft, compared with $51/ft for all other gas wells drilled at the same depth range. The difference is attributed to higher drilling, completion, and water handling costs for coalbed methane wells.