Bakken Shale powerhouse, Continental Resources, is counting on continued momentum as it raises its expectations for North Dakota activity and production for the rest of the year.
Read more about Continental in the Bakken Shale Play
Oklahoma-based Continental announced third quarter results, saying it is betting on recovery from enhanced work at the Bakken shale oil reserve basin in North Dakota, and the SCOOP and STACK reservoirs in Oklahoma.
The company expects to end the year with production volumes that are about 5 percent more than it estimated in August.
“We brought on several excellent producers in the Bakken using enhanced completion designs, including two wells that generated CLR-record 30-day initial rates for the Bakken. This is an encouraging start as the Company begins working down its large backlog of Bakken uncompleted wells and capturing their value.”
Third quarter highlights:
- First STACK Density Test Flows at Combined Initial Peak Rate of 21,354 Boe per Day (70% oil) from Eight Meramec Wells; Seven New Wells Flow at Average Well IP of 2,653 Boe per Day
- Company Initiates Development in STACK Over-Pressured Oil Window
- Bakken Enhanced Completions Yield Company Record Initial 30-Day Production Rates
- Company Begins Working Down Uncompleted Bakken Wells
- Annual Production Guidance Raised and Production Expense Guidance Lowered; Capital Expenditure Guidance Raised on Increased Well Completions
Looking forward to the remainder of 2016, the Company plans to increase the total number of gross operated well completions by 32. They also expect to complete 119 gross operated wells with first production for the year, including 29 gross operated wells in the Bakken.
“The Company plans to increase from two to four stimulation crews in North Dakota by year-end 2016. The Company now expects to end 2016 with approximately 175 gross operated uncompleted wells in the Bakken and approximately 45 gross operated uncompleted wells in Oklahoma. The projected year-end Bakken uncompleted well count of 175 excludes approximately 15 wells that will have been stimulated by year-end 2016, but not produced with first sales until 2017.”
"We have expanded the productive footprint of STACK, SCOOP and the Bakken core, and are increasing the value of these assets," Chairman and CEO Harold Hamm said in a statement.
State mineral resource officials in North Dakota said there's been a steady increase in exploration and production activity there since June, but operators still showed reluctance to move very aggressively so long as oil prices stayed below the $60 per barrel mark. Oil prices on Thursday were in the mid $40 range.
In Oklahoma, the state governor declared a day of prayer last month for the oil sector as the downturn for oil and gas sectors spilled over into other labor pools like manufacturing. Gross production taxes from the oil and gas sector are on pace for two straight years of contraction.
For the third quarter, Continental said its net production was about 5 percent lower than the second quarter and 9 percent lower year-on-year. Most of the decline came from North Dakota, though the company said it had curtailed production there in response to lower oil prices and was now picking up the pace.
Continental reported a net loss of $109.6 million, a loss that's 33 percent greater than the loss from third quarter 2015. In August, the company sold off some of its assets in and around the Bakken area for about $600 million in a move Hamm said helped reduce debt and strengthen the balance sheet.