2016 was a come-back year for Continental Resources (NYSE: CLR). The shale driller overcame some missteps, made early in the downturn, to get back on solid financial footing. Those improvements, combined with rising oil prices and strong well results from an emerging growth play, have returned the company to prominence.
In 2016, CLR set its capital expenditures budget 66% below 2015’s level, to $920 million. Yesterday, the company announced a 2017 capital expenditures budget of $1.95 billion, doubling the amount from 2016. Crude oil is projected to account for approximately 59% of total production by year end, compared with approximately 55% in the fourth quarter 2016.
More than 80% of the drilling and completion budget is focused on completing the Company’s deep inventory of uncompleted wells in North Dakota, additional drilling in the Bakken, and further STACK development, which will drive the 2017 increase in crude oil volumes as a percent of total production.
2017 Operating Plan
Continental plans to operate an average 20 drilling rigs in 2017, an increase of one rig from 2016. The Company expects to complete a total of 280 gross (178 net) operated wells with first production in 2017. The Company also plans to participate in completing 40 net non-operated wells in 2017, 35 of which will be in the Bakken.
The Company plans to complete 131 gross (100 net) operated wells out of its Bakken uncompleted well inventory with first production commencing by year end. In addition, Continental plans to complete with first production approximately 17 gross (8 net) newly drilled Bakken wells in 2017. At year-end 2017, the Company expects to have 140 Bakken wells in inventory, of which 72 gross (40 net) wells will have been completed but waiting on first sales and 68 gross (47 net) operated wells will be waiting on completion.
In Oklahoma, the Company expects to complete 132 gross (70 net) operated wells with first production in 2017, including 98 gross (50 net) operated wells in STACK and 34 gross (20 net) operated wells in SCOOP.
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Gib Knight is a private oil and gas investor and consultant, providing clients advanced analytics and building innovative visual business intelligence solutions to visualize the results, across a broad spectrum of regulatory filings and production data in Oklahoma and Texas. He is the founder of OklahomaMinerals.com, an online resource designed for mineral owners in Oklahoma. ☞Email:g.knight@oklahomaminerals.com
