Continental details breakout year in Bakken, SCOOP/STACK

By Luke Geiver | October 30, 2018

Continental Resources hit an all-time quarterly Bakken production total and all indications for the remainder of the year show the Oklahoma City-based E&P will end the year strong. At 167,643 barrels of oil equivalent produced per day across its Bakken acreage, Continental set a record for production in a quarter. The total for Q3 this year was 23 percent higher than the same time a year ago.

“The performance and returns from the Bakken have been exceptional,” said Jack Stark, president of Continental. “Our entire 2017 Bakken program, which included 133 operated wells, paid out by the end of the third quarter 2018. Now that’s capital efficiency.”

With eight drilling rigs currently running in the Williston Basin, Continental expects to drill and complete another 70 wells by the end of the year.

In the STACK play of Oklahoma, Continental is also showing production increases in Q3 versus last year. Compared to last year, the production increase is roughly 60 percent. In Q3, Continental completed seven wells. There are currently 5 operated drilling rigs running.

In the SCOOP, Project Springboard, a massive oil pad project still under development by Continental, continues on. The project requires 14 drilling rigs targeting multiple zones including the Springer, Woodford and Sycamore reservoirs.

“Project SpringBoard is a massive oil project where we are concurrently developing these reservoirs,” according to Gary Gould, senior vice president of production and resource development. “As expected, we are already realizing operational efficiencies that will translate to significant additional value for shareholders.”

For the remainder of the year, the company has not hedged any of its oil. In Q3, the crude oil differential was $3.72 per barrel below the NYMEX daily average for the period, in part due to strong Gulf Coast pricing.

The company is currently in talks and the final stages of aligning more takeaway capacity from the Bakken through new pipeline infrastructure. The company is also considering the retrofit of existing tanker cars to move more crude by rail.

Existing and new opportunities related to the logistics of moving Bakken crude has the team positive on the future. And, uplifts in well performance show why Stark is excited for the future of the Bakken. Between 2000 and 2014, Continental brought on 185 wells that exceeded more than 100,000 barrels of oil in the first 90 days of production. New completion methods and better technology deployed since 2014, however, has drastically increased that number of wells exceeding 100,000 bopd in the first 90 days of production. From 2015 to the present, Continental has brought on 563 wells that produced more than 100,000 bopd in the first 90 days, or, 161 wells meeting that number per year.

The top 10 list of highest producing Continental wells in the Bakken have all come within that last 8 quarters. According to Stark, new technology and strategies are expanding the play and making acreage once thought to be Tier 2 closer to Tier 1 acreage. “This is an expanding play through technology,” Stark said.

Although Continental wasn’t yet ready to divulge on a long-term plan in the five- to ten-year range, Stark and others did explain that increases in capital spend and major optimism by the team is all linked to the assets the company currently has across the Bakken and Oklahoma.

In addition to its E&P work, Continental has also made gains in the minerals management business. After closing on a deal with Franco-Nevada, the company netted $215 million. The goal is to acquire minerals, with the help of capital provided by Franco-Nevada, in areas where Continental intends to drill future wells.