From the Star Tribune:
The cost of drilling new oil and gas wells in the Bakken region of North Dakota and Montana is dropping and the work is going faster, allowing crude oil to reach the market sooner, a Minnesota-based oil company said Friday.
Northern Oil and Gas of Wayzata added the equivalent of 48 Bakken wells in 2012, and expects to complete almost that many in 2013. In a major shift, multiple wells are being drilled in different directions from a single location, avoiding the need to move equipment as often.
“It is very simple math; if you are drilling four wells on one pad, you are going to get those wells drilled more efficiently,” CEO Mike Reger said on a conference call with analysts as the company beat Wall Street estimates with $19.5 million in net income for the quarter ending in December.
Reger and other executives said drilling times also are dropping — to about 90 days from when the bit first hits the ground to initial oil and gas production. In early 2012, it took twice as much time because oil field services such as hydraulic fracturing teams were in short supply.
One well now can be drilled for $8.4 million to $8.8 million, and company officials see that dropping to $8 million on average by the end of the year. Some wells in Montana, because of the drilling circumstances, have cost under $5 million, the company said.
MP: The revolutionary extraction technologies keep getting better, faster, and cheaper, and will continue to do so in the future.