Continental Resources (NYSE:CLR) plans to triple production and reserves by 2014, and the company will accomplish these goals through the development of oil and liquids rich plays in North Dakota, Montana and Oklahoma.
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Summary
Continental Resources released details on the company's capital budget and production growth for 2011. The company expects to produce 20.6 million barrels of oil equivalent (BOE) in 2011, which is a 30% increase over the company's expected production of 15.8 million BOE in 2010.

Continental Resources will accomplish this production goal by spending $1.36 billion in 2011, with 92% of the capex budget devoted to developing a liquids-rich portion of the Woodford Shale, and properties in the Williston Basin that are prospective for the Bakken and Three Forks formation. These production growth goals for 2011 are double the company's expected production growth of 15% to 17% in 2010. By 2014, Continental Resources will reach production of 41 million BOE and proved reserves of 771 million BOE.

Bakken
Continental Resources has assembled approximately 864,559 acres in the North Dakota and Montana that are prospective for the Bakken and Three Forks formations. The company is operating 21 rigs in this play, and estimates that it has thousands of locations to drill there. This is the largest active rig count of any exploration and production company that is developing the Bakken. Whiting Petroleum (NYSE:WLL) is currently operating 14 rigs to develop its acreage here, and EOG Resources (NYSE:EOG) is operating 13 rigs.

Woodford Shale
Continental Resources has properties in different parts of the Woodford Shale in Oklahoma, including the Anadarko and Arkoma areas. The company has approximately 252,000 net acres under lease in the Anadarko Woodford Shale, and claims that it is the largest single leaseholder in the play, just ahead of Devon Energy (NYSE:DVN), which has approximately 225,000 acres. Continental Resources is allocating $190 million in capital to develop the Anadarko Woodford Shale, where wells have a significant liquids component produced with the natural gas.

Red River
Continental Resources also has properties in the Red River area in North Dakota and Montana. This is an asset that is often overlooked by investors, but is still a substantial part of the company. In the second quarter of 2010, the company averaged production of approximately 15,000 BOE per day from this area and it represented 21% of total proved reserves.

Niobrara Shale
Continental Resources is working on a development program in the Niobrara Shale, which is mostly in Colorado and Wyoming. The company estimates that it has 228 net locations and 53 million BOE of potential reserves in the play.

The Bottom Line
Continental Resources has assembled extensive holdings in the Williston Basin and Woodford Shale, and plans to develop these assets to grow production by 30% in 2011 and triple reserves and production by 2014. (For related reading, take a look at Accounting For Differences In Oil And Gas Accounting.)

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