Continental begins 350-well development

Continental Resources Inc. will drill 350 wells in a 70-square mile area of south-central Oklahoma, the Oklahoma Citybased oil and natural gas producer said Wednesday.

Project SpringBoard includes about 45,000 acres with a gross unrisked reserve potential of more than 400 million barrels of oil equivalent, the company said.

“SpringBoard marks the beginning of fullscale development of our SCOOP oil assets, following years of exploration, leasing and delineation drilling,” Tony Barrett, Continental’s vice president of exploration, said in a statement Wednesday afternoon. “These barrels represent some of the most profitable barrels within the company.”

Phase 1 of the project is underway and is expected to include 100 wells targeting the Springer rock layer. The second phase will target the Woodford and Sycamore layers with 250 wells, the company said.

Three rigs are active in Project SpringBoard, with another two expected in the area by the end of the year.

Continental executives said they have used updated well designs and improved drilling performance to cut the cost of their recent Woodford wells by $1 million to an average of $11.7 million per well.

In northwest Oklahoma’s STACK play, Continental crews have completed their effort to hold the company’s acreage by production and are moving three of the five rigs drilling in a natural-gas rich area to an area that produces mostly oil.

First-quarter results

Continental Resources on Wednesday reported a first-quarter profit of $234 million, or 63 cents a share, up from a net income of $469,000, or less than a penny a share, in the year-ago quarter. Adjusted for one-time items, the company had a net income of $255 million, or 68 cents a share, up from $154 million, or 41 cents a share in the first quarter of 2017.

Revenues surged to $1.14 billion, up from

$685 million one year ago. The company reported earnings before interest, taxes, depreciation, amortization and drilling expenses of $876 million, up from $482 million in the year-ago quarter.

“Our first-quarter results show our 2018 breakout year is off to a strong start,” CEO Harold Hamm said in a statement. “We are breaking away from our peers and capitalizing on decades of exploration success and operational achievements. Coupled with oil-weighted production growth and industry-leading efficiencies, we remain focused on maximizing returns and generating free cash flow now approaching $1 billion in 2018, at current commodity prices.”

Continental produced 287,410 barrels of oil equivalent per day in the first quarter, up 34 percent from one year ago.

The production increase was led by the company’s North Dakota Bakken field, which surged 48 percent to 154,503 equivalent barrels per day. The production in the area was about 80 percent oil.

Continental completed 31 operated Bakken wells in the first quarter and had an average 24-hour initial production rate of more than 2,000 equivalent barrels per day.

“We are clearly seeing a structural uplift in well performance across the Bakken field,” President Jack Stark said in a statement. “Combined with improved differentials and low production costs, our optimized completions are generating some of the best returns we have seen from our Bakken assets.”