Managers crave greater confidence in well construction costs, from the inception of a cost estimate for investment decisions, through cost estimation for budgeting, to cost tracking and control during well construction, and finally, for validity of performance tracking and benchmarking. Shortfalls in well cost estimation and control are due to three main sources: lack of defined processes, lack of discipline, and reliance on outdated or poor methodologies. This technical paper describes advanced methodologies for effective well cost management and documents their benefits to decision-makers and the industry. These include processes from the construction industry for cost tracking / control, best practices for estimating using probabilistic methods and leading to a process that can be applied for any well complexity utilizing modern methodologies. The technical content contributes directly to improved decision making by managers for investment in wells, improved planning for better decision making on choices for well design and drilling / completion operations including applications of various technologies, improved control of costs, and improved confidence that performance tracking and benchmarking are based on valid measures.

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