Bakken has Lowest Average Drilling and Completion Costs in the Country

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The Bakken has the lowest average drilling and completion costs in the country, according to a new study conducted for the U.S. Energy Information Administration.

In 2012, costs were at their highest, but the downturn in oil production in North Dakota has contributed to lower prices.

The study compared the Bakken with four other oil producing areas including Texas and New Mexico.

Although Bakken wells are deeper, drilling in recent years has become more efficient.

Two miles down and two miles out is how far a Bakken rig drills into the ground. That's not cheap to do, but the price has decreased.

"We have certainly seen a fairly significant reduction in operating costs for the Bakken over the past 14 months and a lot of that is due to less competition for the services. We've probably seen 25 to 28 percent reduction," said North Dakota Petroleum Council President, Ron Ness.

According to the study, Bakken wells costs were $7.1 million in 2014, but are estimated to drop to $5.9 million. This is approximately a half a million dollars to a $1 million less than other state's oil formations.

"As the efficiency and productivity have gone up in the wells that are being drilled and are being completed of course we moved into the core area, that helps, but even in those core areas you've seen better wells. That looks good going forward," said Ness.

Ness says operating costs in the Bakken are traditionally higher because of the climate and geography.

The Bakken Inflation which used to drive up prices has also been going down, contributing to lower drilling and completion costs.

Ness says once the Dakota Access Pipeline is built, it will be a key product for shipping oil to market and decrease additional costs.