Development costs per well have generally increased from 2006 to 2012, demonstrating the effect of rapid growth and competition for drilling new wells. Since 2012, costs per well have decreased mainly because of; reduced overall drilling activity and improved drilling efficiencies and this trend should continue for the next couple of years as operators focus on operational excellence. https://www.eia.gov/analysis/studies/drilling/pdf/upstream.pdf
The EIA conducted a recent study to better understand the trends in oil well development costs on a per-well basis in the Eagle Ford, Bakken, Marcellus, and Permian regions, analyzing the Permian's Midland and Delaware basins separately. As seen in Figure 1, upstream costs in 2015 were 25% to 30% below their 2012 levels, when per-well costs were at their highest point over the last ten years. Costs had been rising since the shale oil race began and operators competed heavily for talent, equipment and supplies.
As oil prices began to drop around 2012 so did the cost of well development. The glut of oil has slowed drilling activities and less demand for drilling has pressured vendors to lower costs, and operators are more methodical and efficient in their approach to drilling into shale environments. Oil companies are applying proven manufacturing techniques, such as assembly-line and just-in-time techniques to help optimize processes, streamline supply chains to eliminate inefficiencies and non-productive activities.
The use of technology continues to improve efficiencies and reduce costs as companies evolve their IT environments to leverage new capabilities like; big data and analytics, cloud, mobility and other innovative technologies and approaches to better understand, predict and optimize well development activities and costs. The value of innovative technologies continue to rise as operators gain valuable insight into operations performance.