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Commercial Well

What does Commercial Well mean?

The term commercial well is used in oil & gas industry. Commercial well is a well that produces or can produce oil and gas in sufficient quantities which makes it economically viable.

The proceeds from the sale of production exceeds all directly related costs.

Futures Knowledge Explains Commercial Well

When you drill a well in oil field, you may find oil. But sometime the cost of lifting oil may not be commercially viable. Similarly the oil reserves below some wells may not be adequate to make investment for lifting. Such wells are not commercial wells.

A well which has potential to produce above its breakeven level is called commercial well. It can produce enough oil so that it can be commercially viable at the prevailing crude oil price.

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