Bakken well costs may have started to decline

The Bakken Shale has been producing oil since 2008. Some 3,000 wells have been drilled and production has risen to 450,000 barrels per day. Throughout the period well cost have been rising, however, and one of the assumptions of Bakken production has been that they would continue to rise and the wells would eventually play out.

Now new technological improvements have reversed this pattern. Over the last year, costs per well have actually declined for the first time, as illustrated in the graph above. Just 100 feet below the primary Bakken formation drillers have now discovered an entirely different reservoir, the Three Forks formation, which is sealed off by a separate layer of shale. Continental Oil has developed a new four-well drilling platform that can access both formations with the same well. Where horizontal drilling techniques formerly allowed operators to access one square mile of reservoir per well, they are now able to extend out for two square miles. This has considerably reduced drilling costs.

Estimates are now that there is room for 48,000 wells in the 8 million acres of he Bakken and that it can eventually produce 24 billion barrels. At the current pace, this would be 1.2 million barrels a day, the current rate form the Gulf of Mexico. But even then, geologists estimate that 90 percent of the oil would be left in place. Further developments such as the injection of carbon dioxide could increase this recovery by orders of magnitude.

Real Clear Energy

5 Comments on "Bakken well costs may have started to decline"

Plantagenet on Thu, 30th May 2013 7:38 pm 



Good news all around. More energy for less money.

Drill baby drill is working out real good.

Dmyers on Fri, 31st May 2013 12:23 am 



I’m surprised someone would go to this much trouble to make something out of the nothing this well cost decline is.

What we should note here is that drill baby drill is reaching absurd proportions. Talking forty eight thousand wells. That’s one of those ideas that looks good on paper, but I can’t believe there can be a well drilling carte blanche like that without a slew of horrendous externalities.

The idea that we can now extend our oil extracting tentacles to two square miles what used to be only one square mile doesn’t tell me it will work that much better. Because the fact is, these are not really “reservoirs” as they are described. Shale is shale. It’s hard. That is not a reservoir by any reasonable definition of the word. So, I don’t know that the extra mile extension will accomplish anything. It might. It might not.

While we’re talking about costs going down, I have a hard time seeing why having to drill four wells at once rather than one at a time is going to be so much cheaper. By my reasoning, if you need four wells rather than one, you would actually be spending four times more for the same thing. Tells you it’s a shallow and diffuse resource.

Strange thing to end the article by saying 90% of the oil celebrated by the article will not be available. And then to suggest that carbon dioxide injection could boost the sludge. I’ve never heard of carbon dioxide on top of fracking to max yields. If we were to do that, it would be the great and final pronouncement that we are insane.

Beery on Fri, 31st May 2013 12:33 am 



Planty, you need to make up your mind. Obama is preventing ‘drill baby drill’, remember? The well costs are Obama socialism in action, so it can’t be true.

BillT on Fri, 31st May 2013 4:28 am 



Plant needs help…lol.

This article is like announcing that gas is down ten cents a gallon until it goes up twenty cents.

Victor Capelli on Wed, 7th Feb 2018 12:24 pm 



Socialism is good for the country because CAPITALISM just breeds crime and misery the oil boom in North Dakota has produced terrible human costs-crime prostitution murder and worse! The oil reserves in the Bakken fields are finite and the environmental costs are destroying the water purity of local water aquifers.