Oil production out of North Dakota's Bakken Shale continues to surge higher. The play is now expected to hit daily oil production of more than a million barrels of oil sometime early next year. One secret to its success is that oil companies continue to get more out of each drilling rig.

According to a new report from the Energy Information Agency, each rig in the Bakken is being used to produce more oil. This month, the average rig will be used to deliver 459 barrels of oil production per day. Production per rig is expected to grow in November to about 482 barrels of oil per day. What's pretty stunning is, that's nearly double the just-more-than 250 barrels of oil each rig was adding a year ago. The following chart shows just how efficient rigs have become.

Source: EIA

The transition to pad drilling, along with other efficiency gains, has really helped fuel the Bakken's latest surge. The results have been pretty remarkable. Kodiak Oil & Gas (UNKNOWN:KOG.DL), for example, recently reported a 54% spike in its Bakken oil production. The company has focused on cutting down on the days required to drill each well. As the following chart shows, drilling days for Kodiak Oil & Gas are steadily falling, while completed wells per quarter are increasing.

Source: Kodiak Oil & Gas

The trend toward faster drilling is fueling more than just quicker growth for Kodiak Oil & Gas and its peers. For example, Continental Resources (NYSE:CLR) has used a combination of drilling efficiencies, and the shift to multi-well pads, to slash $800,000 off the cost of drilling each well. That's yielding an increasing rate of return for the company. Overall, the returns that Continental Resources enjoys at $100 oil have improved from 50%, to 65%.

By getting more oil production growth out of each rig, it's enabling companies like EOG Resources (NYSE:EOG) to simply print money from the Bakken. Over the past year, EOG Resources has seen its drilling days drop from 24.3 per well to just 16.9 this year. That has helped EOG to shave more than $600,000 off its completed well cost.

What's pretty remarkable is that, at the same time that the company is drilling more quickly, it's also drilling longer laterals. In fact, each well is now more than 2,000 feet longer than the ones the company was drilling last year. Those longer laterals are helping EOG Resources to recover more oil per well.

Energy companies in the Bakken are really getting much more efficient at drilling wells. That's enabling each rig to deliver more oil production growth. It's this continual improvement, which is yielding real results, that's enabling the Bakken to continue exceeding expectations. That's one of the secrets to why production keeps growing.

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