I've heard reports of somewhere between 2,000 and 4,000, but tens of thousands is an order of magnitude more. Maybe its not you who made it up!! It could be a lie propagated by the industry to give it a fake veneer of strength.
Direct costs of drill a well in the Marcellus (see link to reference below).
http://marcellusdrilling.com/2011/09/how-much-does-it-cost-to-drill-a-single-marcellus-well-7-6m/
The costs to drill a well breaks down this way:
So for tens of thousands of horizontal wells (say 20,000 for arguments sake).
- Land acquisition and leasing: $2.1 million
- Permitting: $10,000
- Vertical drilling: $663,000
- Horizontal drilling: $1.2 million
- Hydraulic fracturing: $2.5 million
- Completion: $200,000
- Production to gathering: $472,000
Direct costs of drilling (pre-stimulation) $3.31 million/well
Simulation/Completion (post-stimulation) $3.127 million/well
Assume 20,000 wells that need stimulation, that's a total post stimulation cost of
$63.4 billion.
Assume 10,000 wells, that's a total post stimulation cost of $31.7 billion.
Given that companies like Devon's last line of defence is issuing shares ($4.6 billion this year and that's one of the largest offerings because debt markets are now shut) and a lot of this will go towards balance sheet repair, dividend payments (what a Ponzi) and operating costs on existing wells, there is no way in living hell that this industry could raise $63.4 billion or even $31.7 billion for well stimulation.
Where ever you got those numbers they are probably a lie and if not they don't make sense as it will never happen.
Eshmun
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