It costs approximately $6M – $9M to drill a typical Bakken and Three Forks well. As far as production goes, it is estimated that each producing well has a total recoverable reserve of approximately 500,000 barrels of oil. This 500,000 barrels of oil will be produced over a 25 year period with the highest production being produced initially and a significant decline within the first few years. At $100 per barrel oil, a typical Bakken or Three Forks well is worth about $50,000,000 in oil produced over the life of that well.
Keep in mind there are over 6000 producing wells in North Dakota today with an incremental 2000 wells being drilled each year. That’s a lot of money! The $50M oil well valuation does not take into consideration the associated natural gas that is produced or the ability to re-frack the well in the future which may bring the 500,000 barrel per well approximation even higher.
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