>Unconventional gas operations are not cheap. Drilling costs are in the range of $5 million to $7 million per well at Horn River, and $4 million to $5 million at Montney. Fraccing costs are estimated to be $2 million to $3 million per well.

The target price for Mako wells is about $12 million, but at the moment, Exxon has still budgeted $25-40 million for the next well. Of course the costs will go down significantly (at least they should) during the development phase.

On thing that is interesting about the article it this:

"Analyst Kevin Lo of FirstEnergy Capital Corp. estimates that fraccing just one of EnCana Corp.’s Horn River shale gas wells in northeastern British Columbia requires a crew equipped with more than 30,000 horsepower of compression"

The Mako wells are much deeper, and are much more challenging as far as pressure and temperatures are concerned, and yet they managed to frac the Mako-6 with just 23,000 HP. That is certainly a good thing.

From a 2007 conference call:

In terms of the service providers let me say we have used Halliburton and we’ve used Schlumberger, and one of the real important things is that, for example, on our last frac job on the Mako 6. I think we had what Lyle, 21000 horsepower on location?

Lyle Nelson: Yes, over that, it was 23,000

MB: 23,000 Horsepower on location and I think that’s more horsepower than has ever been, at least in Hungary and if not Europe, and one of the things that we found is that, and I think this is important, there no problem in fracing these wells. We can frac these wells, so we are not concerned about that risk factor.