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Continental Resources To Accelerate Production Growth In 2011
Continental Resources (NYSE:CLR) will accelerate its production growth in 2011 as the company continues to exploit its extensive holdings in the Williston Basin and other areas. This development is part of a five-year plan by the company to triple production and reserves.
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Production Growth
Continental Resources estimates that its production will grow by 30% in 2011, and reach 20.6 million barrels of oil equivalent (BOE). This would be close to double the 15-17% growth rate in 2010. This growth will be achieved organically as the company does not typically grow through acquisitions.
Williston Basin
Continental Resources core development area is the Williston Basin in North Dakota and Montana where the company is developing the Bakken and Three Forks formation. The company has approximately 865,000 net acres prospective for these plays.
Continental Resources will spend $1.2 billion in capital in 2011 on exploration and development, with 72% of this capital allocated to the North Dakota and Montana Bakken. This will be enough capital for Continental Resources to participate in 530 gross wells in 2011 on its acreage.
Another player in the Williston Basin is GeoResources (Nasdaq:GEOI), which has 44,000 net acres exposed to this Bakken formation. The company has both operated and non-operated wells, and is partnered with many private and public operators.
Woodford Shale
Another 19% will be put into the development of the Woodford Shale in the Anadarko Basin. Although the Woodford Shale has a reputation as a natural gas area, the properties that Continental Resources is developing produce high amounts of oil and natural gas liquids.
Other companies active in the oil and liquids portion of the Woodford Shale include Cimarex Energy (NYSE:XEC), which has more than 100,000 net acres in the play. The company is currently operating nine rigs in the play, and in the third quarter of 2010, Cimarex Energy reported production from its properties that were 64% natural gas, 28% natural gas liquids and 7% crude oil.
Devon Energy (NYSE:DVN) is also developing acreage in the Woodford Shale and doubled the company's acreage during 2010, ending the year with 240,000 net acres prospective for this play. The company drilled 110 wells in 2010, more than double the number of wells drilled in 2009.
Bottom Line
Continental Resources is set to work its Bakken, Three Forks and Woodford Shale properties in 2011 to achieve production growth of 30%. If the company is successful, this will lead to a tripling of production and reserves over five years. (To learn more, see our Oil & Gas Industry Primer.)
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IN PICTURES: 9 Simple Investing Ratios You Need To Know
Production Growth
Continental Resources estimates that its production will grow by 30% in 2011, and reach 20.6 million barrels of oil equivalent (BOE). This would be close to double the 15-17% growth rate in 2010. This growth will be achieved organically as the company does not typically grow through acquisitions.
Williston Basin
Continental Resources core development area is the Williston Basin in North Dakota and Montana where the company is developing the Bakken and Three Forks formation. The company has approximately 865,000 net acres prospective for these plays.
Continental Resources will spend $1.2 billion in capital in 2011 on exploration and development, with 72% of this capital allocated to the North Dakota and Montana Bakken. This will be enough capital for Continental Resources to participate in 530 gross wells in 2011 on its acreage.
Woodford Shale
Another 19% will be put into the development of the Woodford Shale in the Anadarko Basin. Although the Woodford Shale has a reputation as a natural gas area, the properties that Continental Resources is developing produce high amounts of oil and natural gas liquids.
Other companies active in the oil and liquids portion of the Woodford Shale include Cimarex Energy (NYSE:XEC), which has more than 100,000 net acres in the play. The company is currently operating nine rigs in the play, and in the third quarter of 2010, Cimarex Energy reported production from its properties that were 64% natural gas, 28% natural gas liquids and 7% crude oil.
Devon Energy (NYSE:DVN) is also developing acreage in the Woodford Shale and doubled the company's acreage during 2010, ending the year with 240,000 net acres prospective for this play. The company drilled 110 wells in 2010, more than double the number of wells drilled in 2009.
Bottom Line
Continental Resources is set to work its Bakken, Three Forks and Woodford Shale properties in 2011 to achieve production growth of 30%. If the company is successful, this will lead to a tripling of production and reserves over five years. (To learn more, see our Oil & Gas Industry Primer.)
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by
Eric Fox
Eric J. Fox, CFA, is a freelance financial writer and has previous experience working in the asset management industry as an equity analyst and portfolio manager on the buy side. His favorite area to write on is the energy sector and he keeps current on the industry by reading Haynesville Shale, Permian Oil and Gas and various other blogs.
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