Drilling Cost


The right to enter and drill on the property owner's land is accomplished by obtaining a lease.  The lease is subject to title search and proper recording in much the same way as real estate. Many times the bonus for a mineral lease exceeds the value of the property itself.  Between legal cost for title work and lease bonus wells see costs in excess of $1,000,000 for leasing alone.  Some leases with multiple mineral and land owners take several months if not years to negotiate and finalize.  

Site Preparation

Most times, a road must be built to the site.  Good roads are a necessity in order for trucks and heavy equipment to reach the well.   Once at the site, a level area is cleared about 2/3 the size of a football field.  Bulldozers, dump trucks, excavators, and road graders are typically used for this process.  General this process takes between 2 and 3 weeks, but if extensive road work is needed it can take much longer  Construction of roads and drilling site is a major cost factor which can easily exceed $400,000 per location.


When the site is prepared, the drilling rig can be moved into position.  A rotary rig is the modern equipment used.  It is capable of drilling over 1,000 feet per day through use of a rotary bit driven by huge engines.  Fluid or air if forced under pressure down the center of the drill stem to clean out the hole continuously during drilling.  The drilling operation is a very complicated one requiring enormous amounts of planning and teamwork.  A modern drilling project can encompass the use of 30-40 different individual companies to fully complete the process.  Cost depend on the depth and complexity of the well.  Modern horizontal well drilling costs can easily exceed $4,000,000 just in the drilling phase.  Without drilling complications these wells generally take about 3 weeks for the drilling phase.  

Rig Mobilization 

Moving a drilling rig is not a simple task.  Every time a well is drilling a drilling rig must be moved in and assembled.  The process normally takes 3-5 days.  After the well is drilled the rig must be cleaned and disassembled and moved off location.  Rig mobilization and assembly expenses vary depending on how far the rig must be transported, but generally run between $100,000 to $350,000.. 

Miscellaneous costs

Costs outlines above are only some of the cost incurred preparing, drilling, completing and producing of an oil or gas well.  in total, this complete process will encompass 40-50 different individual contracting companies and hundreds of additional minor expenses.