Look at the production coming out of the Permian.
Drilling horizontal sidetracks from abandoned wells in the Permian Basin is yielding a 91 percent internal rate of return on a $7 million investment and delivering 1,500 barrels a day of crude. He predicts large production increases from vertical wells in previously produced areas in the Permian.1,500 bopd = 45,000 bbls/month -- which some Bakken wells do, but generally, initial production for Bakken wells is in the range of 15,000 to 30,000 bbls/month for the first couple of months, and then drops off significantly.
Think of the cost savings when drilling from an abandoned well:
- site surveys have already been done; only need to be reviewed, tweaked
- possibly, up-front lease bonuses are not required
- roads to site are in-place; pads in place but will need to be improved
- some infrastructure in place