Well costs in the U.S. Lower 48 are projected to decline 10% in 2024 and by an additional 1% in 2025, according to new research by Wood Mackenzie.
Despite market factors, including slower E&P activity, the reduction in well costs will be a function of snowballing efficiencies rather than price cuts by oilfield service (OFS) companies.
“Both E&Ps and service providers are emphasizing significant efficiency improvements, albeit for different reasons,” said Nathan Nemeth, principal analyst for Wood Mackenzie. “More efficient operations are helping E&Ps drill and complete wells faster, cutting costs. At the same time, OFS firms are utilizing more efficient kit and workflows to sustain elevated prices.