The Enid News and Eagle, Enid, OK

Local news

October 12, 2012

Continental Resources plans to triple its oil production by 2017

ENID, Okla. — Continental Resources is expecting a good future.

The company announced plans to triple its oil production within the next five years during a stockholders’ meeting Tuesday.

The growth plan will triple production and proven reserves by the end of 2017, when it will reach average production of 300,000 barrels of oil equivalent per day.

Continental’s proven reserves in mid-2012 were 610 million BOE, and the company wants to triple that figure by the end of 2017.

In the quarter ended June 30, average production totaled 94,852 barrels of oil equivalent per day. The expected level of growth would result in production of 108 million barrels of oil equivalent per day by the end of 2017.

In 2013, company expectations are 30 percent to 35 percent growth in production, based on a capital expenditures budget of $3.4 billion. That growth will produce an expected 300 net wells in 2013.

Oil differentials will range in cost between $8 and $11 per barrel in 2013, and the company anticipates liquid-rich natural gas production will have an average premium of $1 to $1.50 per million cubic feet.

The growth plan is focused on  its premier oil and natural gas liquids in the Bakken play of North Dakota and Montana and Oklahoma’s Woodford play.

Chairman and CEO Harold Hamm said the company’s legacy assets are in the largest oil field found in 40 years.

Those assets are supplemented by a new and expanded view of the Anadarko Woodford, a new oil province with multiple oil plays.

Continental is the largest leaseholder in the Bakken, with nearly a million acres. It also has 315,675 net acres in the Woodford play.

In addition to the production increases, Continental expects to increase its number of employees. Some 255 jobs moved from Enid when the company relocated its headquarters to Oklahoma City.

Oklahoma City Council last Decem-ber approved paying Continental $7.2 million in job creation incentives from a $75 million general-obligation limited tax bond issue approved by voters in 2007.

The deal requires creation of 461 new jobs over seven years, in addition to the 255 employees movied from Enid, with an average annual compensation of $125,000 for new hires. The company has told city officials the average annual compensation for existing employees is $165,184, accor-ding published reports.

Drilling costs have skyrocketed in the Bakken play because of the amount of activity and the remoteness of the regions in North Dakota and Montana. However, drilling companies are using a more efficient method to sinking wells that is expected to bring down costs.

Continental shares have risen by more than 50 percent in the past year.

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