Oil continues to flow out of North Dakota's Bakken Shale at an incredible pace. The latest data available is from August, where production topped 910,000 barrels of oil per day. That has the state's Mineral Resources Department seeing oil production topping one million barrels per day by early next year at the latest. That's great news for oil producers, especially with oil prices still over $100 per barrel.
Focused oil producers like Kodiak Oil & Gas (UNKNOWN:KOG.DL) have really enjoyed the Bakken's production run. Its production has grown by a 168% compound annual rate since 2010. Even more diversified Bakken operators like Halcon Resources (NYSE:HK) and ConocoPhillips (NYSE:COP) have enjoyed Bakken-fueled production growth. Production growth at Halcon Resources was 10% quarter over quarter, while ConocoPhillips sees its Bakken production growing by 18% annually through 2017.
Kodiak Oil & Gas has really taken advantage of its solid position in the Bakken to drive phenomenal production growth. In 2010 the company's average daily production was 1,260 barrels of oil per day, or BOE. This year the company sees its production topping 34,000 BOE per day. It's high rates of production growth like this that have helped fuel North Dakota's surge in oil production.
Kodiak has been especially active this year. Before the year started, it was planning to spend about $775 million to drill about 75 wells. But its solid results gave the company the confidence to raise its spending plan to a billion dollars to drill 100 wells. Capital decisions like this from Kodiak Oil & Gas are also helping fuel the Bakken's production surge.
Halcon Resources has taken a bit of a different route to increase its production. The company has focused on improving its economics, including the recovery factor to boost its production. For example, its switch to slickwater fracs and increased proppant volume has been a game changer. Initial production rates have surged 58% in the Bakken and 73% from the Three Forks. These changes aren't unique to Halcon Resources, but do serve as a great example of how the industry is driving this production surge.
Finally, ConocoPhillips' approach has been made with a focus on long-term development. The company has a five-year capital plan totaling $4 billion. The plan will add 45,000 BOE of production per day by 2017, which results in an 18% compound annual growth rate. ConocoPhillips sees at least 1,400 future drilling locations in the Bakken, which will keep its oil production growing for years to come.
What's interesting is that all three companies are taking a slightly different approach to growing Bakken production. But the overall result has been continued production growth. That's interesting because many of these companies are still developing best practices. It's quite possible that over time the industry will figure out how to extract even more oil for every well that's drilled.
Figuring out how to get more oil out of the rocks will be quite the challenge. According to Continental Resources (NYSE:CLR) CEO Harold Hamm there are about 24 barrels of recoverable oil and gas sitting in the Bakken and Three Forks reservoirs. However, he suggests that the industry could one day boost its recovery from those plays to more than 45 billion barrels of oil and gas given the right technological advancements. It's why he suggests that the industry is just getting started at developing the Bakken even as it draws near to the million barrel per day production mark.
It appears that America's Bakken-led oil boom is still in the early innings. That would suggest that Bakken-focused companies like Continental Resources and Kodiak Oil & Gas will continue to deliver growth for investors.
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Fool contributor Matt DiLallo owns shares of ConocoPhillips. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.