2026 land rig: $25K-$50K/day. Offshore: $200K-$500K/day
Fracking, perforating, flowback (horizontal wells: $1M-$3M+)
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Introduction
A Permian Basin horizontal well that cost $6.5 million in 2020 costs $9 to $12 million in 2026. Service cost inflation driven by diesel prices, labor markets, and steel tariffs has added 35% to 50% to well construction costs across most U.S. basins over the past four years, while completion cost intensity (frac stages, sand volumes) has simultaneously increased to optimize production. The U.S. Energy Information Administration's drilling productivity report tracks this cost evolution basin by basin, and the message is consistent: per-foot drilling and completion costs are the primary capital variable in E&P economics, and benchmarking your costs against basin averages is the first step in identifying efficiency opportunities or overcharging by service contractors. A detailed authorization for expenditure (AFE) analysis that breaks costs down to per-foot terms makes contractor comparisons, capital budget planning, and acquisition underwriting far more rigorous.
What This Calculator Does
This drilling cost per foot calculator aggregates all well construction costs into a total authorization for expenditure (AFE) and divides by true vertical depth (TVD) to compute a standardized per-foot cost benchmark. It covers all AFE components: rig day rate and drilling days, drill bits, casing and tubing, cement services, drilling mud, directional services, completion (fracturing, perforating, flowback), logging and testing, and overhead. The calculator outputs total drilling cost, total completion cost, combined AFE, cost per TVD foot, and comparison against 2026 basin averages for the Permian, Bakken, Eagle Ford, Haynesville, and Gulf of Mexico.
The Formula
Drilling costs are built from the bottom up across two phases. Drilling phase costs (rig time, bits, casing, cement, mud, directional drilling) cover construction of the wellbore to total depth. Completion phase costs (hydraulic fracturing, perforating, flowback, workovers) cover preparing the well for production. Rig day rates constitute 20% to 35% of total drilling AFE. Completion costs now represent 40% to 60% of total well cost for horizontal shale wells due to high-intensity multi-stage fracturing. Per-foot calculations use TVD (vertical depth) rather than measured depth (MD) for standardized comparison across wells with different lateral lengths. Using MD for horizontal wells with 10,000+ ft laterals would understate per-foot costs compared to vertical well benchmarks.
Step-by-Step Example
Calculate rig and drilling phase costs
Mid-Continent horizontal well. Rig day rate: $45,000/day × 28 days to TD = $1,260,000. Drill bits: $175,000. Casing (4 strings): $1,350,000. Cement: $280,000. Drilling mud system: $480,000. Directional drilling services: $320,000. Logging (LWD/wireline): $185,000. Other drilling: $150,000. Total drilling phase: $4,200,000.
Calculate completion costs
Hydraulic fracturing (24 stages, 1,200 lbs sand/ft): $2,650,000. Perforating: $140,000. Flowback and cleanup: $125,000. Wellhead and surface equipment: $280,000. Total completion: $3,195,000.
Compute total AFE and per-foot cost
Total AFE: $4,200,000 + $3,195,000 = $7,395,000. TVD: 12,000 ft. Cost per foot: $7,395,000 / 12,000 = $616.25/ft. Measured depth with 8,000 ft lateral: 20,000 ft. MD-based cost: $369.75/ft (not comparable to TVD benchmarks).
Benchmark against basin averages
Mid-Continent (SCOOP/STACK) 2026 benchmark: $550 to $700/ft TVD. This well at $616/ft is within the average range. Compare to Permian average of $600 to $800/ft: this well is cost-competitive with Permian efficiency. Non-productive time (NPT) of 10% to 15% not included in base AFE; apply contingency of $700,000 to $1,100,000.
Real-World Use Cases
Contractor Bid Comparison
An operator receives competitive bids from three drilling contractors for a 10-well development program. Contractor A quotes $44,000/day average, projects 25 drilling days per well. Contractor B: $38,000/day, 30 days. Contractor C: $50,000/day, 22 days. Per-well drilling rig cost: A=$1,100,000, B=$1,140,000, C=$1,100,000. Day rate alone is misleading; the calculator normalizes to cost per total AFE, including service quality factors reflected in NPT history, showing Contractor C's higher day rate justified by superior reliability and fewer rig repairs.
Annual Capital Budget Planning
An independent E&P company is allocating its $120 million annual drilling budget. Average per-foot cost: $700/ft for their Permian horizontal program. Average TVD: 13,500 ft per well. Average total AFE including completion: $9.45M per well. Budget supports: $120M / $9.45M = 12.7 wells. They plan 12 wells with $7M contingency reserve for NPT and cost overruns.
Acquisition Due Diligence
A buyer evaluating undeveloped Haynesville acreage needs to estimate future development capital. Comparable well costs in the area: $600/ft, 15,000 ft TVD wells = $9M per well. The acreage supports 40 future drilling locations. Total development capital: 40 × $9M = $360M. At projected EUR of 12 Bcf per well and $3.00/Mcf gas, gross undeveloped value before development cost is $1.44 billion. After $360M in drilling capital, NPV10 of undeveloped resource is approximately $485M, supporting the buyer's maximum bid.
Comparison
| Basin / Play | Avg Well Type | Avg TVD | Drilling Cost | Completion Cost | Total AFE | $/ft TVD |
|---|---|---|---|---|---|---|
| Permian Basin (horizontal) | Oil, 15,000 ft lateral | 12,000 ft | $3.5-$5M | $4-$6M | $9-$12M | $600-$800 |
| Haynesville (horizontal) | Gas, 10,000 ft lateral | 11,000 ft | $3-$4.5M | $3.5-$5M | $7-$10M | $550-$700 |
| Bakken (horizontal) | Oil, 8,000 ft lateral | 10,500 ft | $2.5-$4M | $3-$4.5M | $6.5-$9M | $450-$650 |
| Eagle Ford (horizontal) | Oil/gas, 7,500 ft lateral | 9,500 ft | $2.5-$3.5M | $3-$4.5M | $5.5-$8M | $450-$600 |
| Gulf of Mexico (deepwater) | Oil, vertical/directional | 18,000 ft | $20-$40M | $5-$15M | $30-$60M | $1,500-$3,000 |
| Conventional vertical | Oil/gas | 8,000 ft | $1.5-$2.5M | $0.5-$1M | $2.5-$5M | $300-$500 |
Common Mistakes to Avoid
Not separating drilling and completion costs in per-foot reporting. Completion costs for horizontal wells now exceed drilling costs in most unconventional plays. Reporting only 'drilling cost per foot' that excludes completion gives a $350/ft figure when true all-in cost is $700/ft. Always report total AFE including completion.
Using measured depth instead of TVD for horizontal well benchmarking. A 15,000 ft TVD well with a 10,000 ft horizontal lateral has 25,000 ft measured depth. MD-based cost ($360/ft) is incomparable to TVD-based cost ($600/ft) or to vertical well benchmarks. Use TVD as the standard denominator for all inter-well comparisons.
Building AFEs without non-productive time contingency. Average industry NPT adds 10% to 25% to planned drilling days. Stuck pipe, lost circulation, equipment failure, and weather delays are statistically inevitable across a multi-well program. Build 15% to 20% contingency into every AFE before presenting to management or investors.
Not updating AFEs for current service costs. Steel casing prices, frac sand costs, diesel, and water hauling rates fluctuate with commodity markets and tariffs. A 2024 AFE template may underestimate 2026 casing costs by 15% to 20% due to steel tariff impacts. Use current vendor quotes for all major line items.
Forgetting surface facilities in full-cycle cost analysis. The well AFE covers the wellbore only. Flowlines, separators, tank batteries, compressors, and pipeline connections add $250,000 to $2,000,000 depending on infrastructure distance and complexity. Full-cycle capital cost must include both well and facility costs for accurate IRR modeling.
Frequently Asked Questions
Accuracy and Disclaimer
Drilling cost estimates are based on industry benchmarks and the AFE component inputs you provide. Actual well costs vary significantly by basin, formation, well design, depth, directional complexity, service contractor performance, and market conditions. Non-productive time, wellbore instability, equipment failures, and supply chain delays commonly add 10% to 30% to planned AFEs. Steel casing, frac sand, water, and chemical prices fluctuate with commodity markets. Regional service cost differences of 20% to 50% exist between active and less-active basins. This tool is for planning, benchmarking, and educational purposes and does not constitute a formal AFE, reserves engineering analysis, or investment recommendation. Engage petroleum engineers, drilling engineers, and completions specialists for well-specific AFE preparation and economic evaluation.
Conclusion
Drilling cost per foot is the primary operational efficiency metric in E&P, analogous to cost per unit in manufacturing. Operators who track it rigorously across wells and contractors identify inefficiencies that compound across multi-well programs. A $100/ft difference on 15,000 ft TVD is $1.5 million per well. Across a 10-well program, that is $15 million. After calculating your per-foot cost, use the Breakeven Oil Price Calculator to determine how drilling capital affects your full-cycle breakeven price, and confirm the investment is justified by projected recovery and current commodity prices.
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