It's an entirely different process than for liquefied natural gas. To give you some specifics, when we first go into an area we drill what we call exploration wells. They are typically multi-million-dollar events of $8 million to $10 million. Part of that is for the drilling process itself, and the other part is for the completion process. With shale gas, the ability for the gas to flow is very low, so we have to create a natural pathway for it to get to the surface. We use the fracture stimulation technique my colleague mentioned. The actual cost of that stimulation is the most expensive part of the process. A typical exploration well could cost as much as $10 million to drill and complete.
Once we learn more about the specific project we're in, those costs on shale plays always come down. Our history shows us that those costs will typically be cut in half or a third over the next couple of years.
A good example that our company uses is in the Marcellus shale play. We started our first well there in November 2008, exactly two years ago, and our first well cost $8 million. We typically drill and complete wells now for about $4 million, so we've cut our costs in half. At the same time, the reserves or the gas production from that well have increased with time. That's also a characteristic of the shale plays. The costs go down as we drill more, learn more, and create more efficiencies. The reserves that are produced from the wells get better and better as we learn the proper recipe for how to drill and complete the wells more effectively.