Forecasting New Bakken Well Costs

A new study completed by IHS Global Inc. for the U.S. Energy Information Administration shows how upstream-related costs in the Bakken have evolved since 2012.
By The Bakken Magazine Staff | May 05, 2016

A new study completed by IHS Global Inc. for the U.S. Energy Information Administration shows how upstream-related costs in the Bakken have evolved since 2012. When compared to 2012 levels, upstream costs in the Bakken circa 2015 were roughly 30 percent lower. Upstream service prices peaked in 2012, the study says. By 2018, upstream related costs could decrease by a range of 7 to 22 percent per barrel of oil equivalent. Additional efficiencies in drilling rates, lateral lengths, proppant use, multi-well pads and discrete fracture stages will be the main drivers in reducing upstream costs, the study also says.

“The adoption of best practices and the improvement of well designs have reduced drilling and completion times, decreased total well costs and increased well performance,” EIA’s study said. “Greater standardization of these drilling and completion practices and designs across the industry should continue to lower costs.”

Amongst the other shale plays studied—including the Eagle Ford, Marcellus, Midland Basin and Delaware Basin—the Bakken recorded the highest overall well costs due to the length of lateral and use of manufactured and resin-coated proppants. The Marcellus, in comparison, has the least costly wells due to shallower drilling depths and the general use of less expensive natural sand.

On average, the Bakken does have the lowest drilling and completion costs of any basins included in the study. Drilling rig efficiency and pressure pumping crew capacity has helped to draw down the average price to drill and frack a Bakken well. In the future, greater standardization in drilling and completion practices could drive per-well upstream costs down even further.