BISMARCK, N.D. (AP) -- A typical well drilled in North Dakota's rich Bakken and Three Forks formations will produce about 540,000 barrels of oil during its 29-year lifespan and will generate more than $20 million in net profit, according to state Department of Mineral Resources data.
Over its lifetime, an average Bakken or Three Forks well will pay more than $4.5 million in taxes and about $7.5 million in royalties to its mineral owners, agency data show.
"The longevity of each well means this is going to be around for a while," agency spokeswoman Alison Ritter said. "We can look at each well as a driver for the economy. All the taxes stay here, the salaries and wages stay here so it's also a good investment."
Drilling horizontally into the formations, which lie two miles underground in western North Dakota, costs companies about $7.9 million; each well will pay more than $2 million in salaries and wages over its lifetime, the agency said.
North Dakota, the nation's No. 2 oil producer behind Texas, had a record 6,921 producing wells in March, or nearly double the amount for the same month in 2007, when the state's oil rush still was in its infancy.
State data show there were 3,382 Bakken and Three Forks wells in March. Those formations have been the biggest producers of crude in recent years, due to advances in horizontal drilling and hydraulic fracturing techniques.
Most oil produced in North Dakota during the past 60 years has come from the Madison formation, a layer of oil producing rock directly above the Bakken that was tapped for decades using traditional vertical wells.
North Dakota oil drillers produced a record 152.9 million barrels of crude in 2011, up more than 35 percent and nearly 40 million more barrels than the previous record set a year earlier. More than 80 percent of the state's oil production last year came from the Bakken and Three Forks.
A record 217 rigs were drilling in the state's oil patch on Tuesday. Nearly 95 percent of rigs drilling in North Dakota are aimed at the Bakken and Three Forks. State and industry officials say 99 percent of them hit oil, while nine of 10 are profitable.
An average Bakken or Three Forks well initially produces about 923 barrels of oil daily but drops to about half that within the first couple of years, data show. The wells produce an average of 76 barrels a day after five years and drop to less than 10 barrels daily after 25 years, the agency said.