It probably was an expensive well. The operators all say they are bringing prices of completed wells down, to the neighborhood of $7 - $8 million but I don't put much faith in those estimates. The biggest problem is figuring out what is being paid for; too many things that can be hidden in numbers like that. I think we will continue to see "cost containment" in the corporate presentations, but with a) huge proppant volume; and, b) slickwater adding 35% to the average EUR in the Basin, I think the emphasis is going to be on raising EURs this year and next (despite the cost) and then get back to trying to contain costs. Operators will see savings in pad drilling and leasing costs, offsetting completing/fracking costs.I wrote that on September 18, 2014. Tonight, while reviewing the most recent CLR presentation, my thoughts were confirmed. Slide #50 of the presentation shows the cost of completed CLR wells. Between 2012 and early 2014, operators were talking about decreasing the cost of completed wells. CLR was reporting the following:
- 2012: $9.2 million
- 2013: $8.0 million
- 1H14: $7.8 million
- But then, starting earlier this year, the price of completed CLR wells increased from $7.8 million to $10 million, due to higher proppant volumes and slickwater.
Whiting has differentiated itself in the Bakken as the "low cost operator' in its corporate presentations. It will be interesting to see if that continues to be a bullet in their presentations once they acquire KOG, with their very expensive wells.