Why Horizontal Cardium Wells Cost Less To Drill In 2017

The cost to drill, case and complete a horizontal well in Alberta’s prolific Cardium formation dropped significantly this year compared to the prior winter drilling season.

That assessment is based on new well-cost data researched for PSAC’s Well Cost Study for Winter 2016. Click here to access the latest study, comparative history and sample data. It includes cost estimates for multiple well types across several Canadian regions and formations.

Cost estimates specific to the Cardium formation, for example, can be seen through three typical horizontal wells in two different PSAC regions (see map below):

  • AB2E – Foothills Front; West Pembina area; total measured depth1 3,200m
  • AB2F – Foothills Front; Garrington area; total measured depth 3,600m
  • AB5F – Central Alberta; Pembina area; total measured depth 2,600m

All three type wells, AB2E, AB2F and AB5F, have seen total drilling, casing and completion costs drop by 6% this winter compared to last. The largest cut in costs, on a per metre basis, was at the well in the Garrington area, the deepest(1) of the three Cardium type wells in the study. 

PSAC Cardium Chart 1.jpg

Source: PSAC Well Cost Study, powered by CanOils – find out more.

Reduced costs for drilling/casing are the primary cause of lower, overall Cardium well costs. For example, in the AB5F Cardium type well in the Central Alberta PSAC region, drilling and casing costs fell by 7%, while completion costs only dropped by 2%.  

Drilling and casing costs are comprised of multiple items and the price estimate of each component is accessible within the PSAC Study.

Looking closely at the AB5F type well cost estimates, we attribute the 7% fall to lower casing and cementing costs, which fell by 22%, and rentals, which fell by 29%. Two components that make up the PSAC drilling and casing cost estimate actually increased this year for this AB5F Cardium well, namely construction and rig contract costs.

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