Continental’s 2017 budget back above $1 billion
It’s back to the billions for Continental Resources. The independent exploration and production company focused on the Bakken and the SCOOP/STACK shale plays said it will spend roughly $1.95 billion on horizontal drilling, unconventional well completions and oilfield infrastructure development in 2017. In 2016, the company only budgeted for $920 million.
The majority—70 percent—of Continental’s 2017 budget will be invested on Bakken drilled but uncompleted wells. According to the company’s estimated rates of return on the incremental cost forward cost of completions, the $550 million planned for Bakken DUCs will be well spent. Continental estimates a 100 percent rate of return on its investments into DUCs. To complete its DUC inventory, five to seven frack crews will be deployed by Continental throughout the year. In addition to the 131 operated wells it will complete this year, Continental will also participate in 31 non-operated Bakken wells.
Several completion strategies will be used this year, including larger proppant loads, diverter technology, shorter stage lengths and shorter cluster spacing, according to the company. High-rate production lift technology will also be used to “accelerate fluid recovery and early production rates.”
Drilling new wells in the Bakken will yield a 40 percent rate of return for the Oklahoma-based operator in 2017. The company intends to invest $490 million in new well drilling in the Bakken this year while running four rigs. Wells drilled this year should cost the company $7 million. Overall new well count for the company could reach 101.
In Oklahoma, Continental will focus on developing its acreage in the SCOOP, STACK and Northwest Cana fields. The STACK region will receive $375 million with total production bringing 60 percent oil and 100 percent rates of return. The SCOOP will receive $245 million, bring 55 percent rates of return and produce 55 percent liquid hydrocarbons. Roughly 132 gross operated wells will be brought on first production this year, including 98 in the STACK and 34 in the SCOOP.
Outside of its drilling and completion activity, Continental intends to spend roughly $230 million in land, facilities and other activities.
By year’s end, the company expects to increase its daily oil per barrel protection totals from the 210,000 boepd to roughly 260,000 boepd.
Harold Hamm, chairman and CEO, said he’s never been more excited by the company’s opportunities to realize the value of what it considers to be premier assets.
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