Federal officials said the U.S. Geological Survey (USGS) will begin a two-year study of the Bakken Formation in October to obtain a better estimate of undiscovered, technically recoverable oil and gas contained in Montana and North Dakota portions of the shale play.

“The decision to update the oil resources assessment in the Bakken Formation is based on new scientific and technical information,” USGS spokeswoman Jessica Robertson told NGI’s Shale Daily on Monday.

The USGS last performed an assessment of the Bakken in 2008. That study estimated mean undiscovered volumes of 3.65 billion bbl of oil, 1.85 Tcf of natural gas and 148 million bbl of natural gas liquids. The oil figure — a 25-fold increase over a 1991 assessment of 151 million bbl of oil — represented the largest amount ever assessed by the federal government and the largest in the Lower 48.

“It sounds dramatic, but back in the early 90s there wasn’t much known about production from the Bakken,” USGS Project Manager Chris Schenk, who worked on the 2008 study, told NGI’s Shale Daily on Monday. “There wasn’t much going on there.” He added that the gas and gas liquids totals were found through a co-product ratio, not by separate tests.

Robertson said USGS scientists met recently with industry experts involved in drilling and oil production in the Bakken, and added that the scientists “learned a great deal” about resource development in the shale play since 2008.

“[Since 2008] there have been more than 1,000 wells drilled in the Bakken, revealing significant new geological information,” Robertson said. “The industry is now producing from intervals not assessed in the last study, [including] vertical horizons beneath the surface of the earth that were not being produced before and for which we didn’t have information. These advances mean more oil could potentially be recovered.”

Interior Secretary Ken Salazar echoed that sentiment. In a statement Thursday, Salazar said the study would be conducted “with the best science available, and with wells drilled in the Bakken during the past three years, there is significant new geological information. With ever-advancing production technologies, this could mean more oil could potentially be recovered in the formation.”

Schenk said multi-stage hydraulic fracturing, a technology in its infancy in the mid-2000s, would help USGS engineers with the new study. He added that drilling and production activity in the Bakken would continue during the study.

Asked if the USGS believes estimated volume totals will increase after the 2011 study is concluded within two years — depending on funding — Schenk said, “We don’t know. As project chief, I’ve seen the numbers go up and I’ve seen them go down. You never really know until you do the assessment. We’ll be looking at every well that’s been drilled and estimate our own recoveries. It’s a pretty involved process.”

The Bakken/Sanish/Three Forks Basin area has seen a steady increase in drilling activity over the past year. According to NGI‘s Shale Daily Unconventional Rig Count, the number of rigs searching for natural gas and oil in the area increased 61% from 108 on May 21, 2010 to 174 during the week ending May 20, 2011.