The North Dakota Industrial Commission, Department of Mineral Resources, has released a new and higher average cost for drilling and completing Bakken wells in North Dakota.
Lynn Helms, director of the department that includes the state’s oil and gas division and geological survey, is now quoting $8.5 million for drilling and completing a Bakken well, versus the $7.3 million estimate he used in a December presentation, and the $6.6 million figure he used in August. (See related story on well costs on page 1 of this issue.)
The latest estimate is in a slide he used in a March 20 presentation to the North Dakota Legislature’s Energy Development and Transmission Committee, titled “What Does Every New Bakken Well Mean to North Dakota.”
Helms told legislators that oil companies are using a “flat $86 per barrel” for their “forward economics.”
If the oil price “drops to $55 per barrel we’ll lose rigs and that will put us on the black curve,” he says.
A typical 2012 North Dakota Bakken well will produce for 29 years, producing an average of 580,000 barrels of oil.
The life of the well can be extended, Helms notes, with enhanced oil recovery efforts.