The Enid News and Eagle, Enid, OK

Local news

June 22, 2008

Continental right in middle of North Dakota oil action

BISMARCK, N.D. (AP) –– A single successful oil well tapped below the Bakken shale formation in western North Dakota has spurred speculation a separate — and perhaps rich — oil-producing reservoir may be buried in the state’s oil patch, and Enid’s Continental Resources is right in the middle of the action.

Continental Resources Inc. says its new oil well in Dunn County produced an average of about 700 barrels of oil a day during its first week of production last month.

It was Continental’s first well in the Three Forks-Sanish formation, said Harold Hamm, the company’s chairman. The formation is made up of sand and porous rock directly beneath the Middle Bakken, which lies two miles under the surface in western North Dakota and holds billions of barrels of oil.

Hamm, who also is a geologist, said his company has a dozen oil rigs working in North Dakota, and owns about 300 wells.

The company owns 41 percent interest in the new well. Hamm said it rivals production of the company’s top-producing wells in the Bakken.

“It’s a very nice well,” he said.

Continental Resources stock rose $11.78, or 23.1 percent, to $62.84, after the company reported the production results of the well on May 20. It closed Friday at $68.88.

Hamm said Continental is the largest leaseholder in the Bakken Shale, with more than a half-million acres in North Dakota and Montana. Most of the acres are in North Dakota, he said.

The company also has wells in Oklahoma’s Woodford Shale, he said.

Continental has increased its drilling budget this year to $783 million, or $167 million more than originally planned, Hamm said. Most of the drilling will occur in the Bakken, but the company also will target several more wells beneath it.

Hamm said each well in the Bakken or the formation below it costs more than $5 million to drill.

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