You must get a permit. That’s a few thousand dollars. But waiting for it? That’s months of downtime. Time is literally money—$50,000 a day, remember?
Then there’s the blowout preventer. It’s a giant safety valve. Costs $500,000 to install. If it fails, you get a Deepwater Horizon disaster. Not fun.
And don’t forget the frac job. Hydraulic fracturing adds $2 million to $5 million per well. It’s like giving the rock a superpower wash. Expensive but efficient.
Wait, Is It Worth It?
Here’s the kicker: If you hit a gusher, that $10 million well pays for itself in three months. Oil at $80 a barrel? A solid well produces 500 barrels a day. That’s $40,000 a day. Numbers start to look good.
But nature is a troll. Most wells aren’t gushers. The average U.S. well produces 10 to 20 barrels a day. That’s $1,600 a day revenue. Your daily costs? Still $50,000+. Math says: “Ouch.”
That’s why oil companies drill dozens of wells. They gamble. They hope one hits big. It’s like buying a hundred lottery tickets—but each ticket costs a mansion.
Drill Cost Per Hole at Kevin Davidson blog
