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.