Continental Resources Inc. increased production by more than 25% during the first quarter of 2014 as it continued to tinker with various completion methods in the Bakken Shale and made plans for more drilling through the rest of the year in a legacy shale play in south central Oklahoma.

The Oklahoma City-based company said total production averaged 152,471 boe/d during 1Q2014, a 25.5% increase over the 121,532 boe/d produced during the previous first quarter. Oil and natural gas production in 1Q2014 averaged 106,398 b/d and 276.4 Mcf/d, respectively.

Continental’s production in the Bakken — in North Dakota and Montana combined — totaled 97,457 boe/d during the first quarter of 2014, a 4.4% increase over the 93,335 boe/d produced in the play during the preceding quarter, 4Q2013, and up 26.7% from the 76,927 boe/d produced in 1Q2013.

The company completed 177 gross (67 net) wells in the Bakken in 1Q2014. In North Dakota, Continental completed 50 net wells targeting the Middle Bakken (MB) and Three Forks One bench, and six net wells targeting the Three Forks Two (TF2) and Three Forks Three (TF3) benches. The remaining 11 net wells completed during the quarter were all in Montana, and all were targeting the MB.

Continental said it plans to complete 870 gross (287 net) wells in the Bakken in 2014, and will operate an average of 21 rigs in the play for the remainder of the year.

During a conference call to discuss 1Q2014 last Thursday, COO Winston Bott said the company’s inventory of wells that have been drilled but aren’t producing stood at 100 wells. He said the total is “down from February but [is] still higher than our normal. We hope to work down the bulk of the excess during the second quarter, and we have eight completion crews working to accomplish this.”

During the quarter, Continental continued its program of using various completion methods, including different fluids for hydraulic fracturing, increased use of proppant and shorter stage lengths. The company said it operated and completed about 40 gross wells in 4Q2013 and 1Q2014. Bott added that Continental has now completed three of four density pilots in the Bakken/Three Forks formation, all of which are on 1,320-foot spacing.

Continental said 13 of the 14 wells in its Hawkinson unit in Dunn County, ND, were trending on average 50% above an estimated ultimate recovery (EUR) model of 603,000 boe. At its Tangsrud unit in Divide County, ND, 12 new wells were completed in 1Q2014 and had a combined maximum 24-hour initial production (IP) rate of 5,340 boe/d, or 445 boe/d per well.

“The wells are being monitored closely to assess if economics using current completion designs will justify including TF2 and TF3 in future development in this particular area,” Continental said.

At a third pilot project area in the Bakken, eight new wells on the Rollefstad unit in McKenzie County, ND, had a combined maximum 24-hour IP rate of 22,460 boe/d, or 2,810 boe/d per well.

“This is a programmed approach and we want to build a statistical database with adequate production history,” Bott said. “Our goal ultimately is to combine our completion design tests with our downspacing pilot results to maximize recoveries, accelerate production, and then thus drive higher-realized returns and greater net present value.

“These tests will be important elements as we move forward into full-field development. Although we are early in our program, we are encouraged by the uplift that we and other operators are experiencing. The impact of these efforts has potential to add significant upside to the field.”

In the South Central Oklahoma Oil Province (SCOOP) — a legacy shale play that Continental claims is geographically similar to the Bakken, Marcellus and Eagle Ford shales (see Shale Daily, Oct. 11, 2012) — net production averaged 29,363 boe/d, a 23.6% increase over the 23,754 boe/d produced in 4Q2013. Net production more than doubled from the previous first quarter, which had recorded 14,232 boe/d.

Continental said its primary focus in the SCOOP area was to continue exploration and appraisal activities, and drilling wells to hold acreage by production (HBP). The company added that it was shifting more and more to 1.5- to 2-mile extended laterals for superior returns. Continental said it operated an average of 19 rigs in the play during 1Q2014, and planned to average at least 18 rigs there for the remainder of the year.

“We had the opportunity to high-grade part of our rig fleet in the first quarter and have done that, bringing in high-caliber rigs to drill this complex play and support our increasing desire to drill more extended laterals,” said COO Winston Bott. “For the quarter, about half of our wells were drilled in the condensate window and half in the oil window.”

Bott and Continental highlighted the initial production (IP) rates of two wells drilled in Stephens County, OK, targeting the SCOOP’s condensate gas window. The first well, Claudine 1-29-32XH, had an IP rate of 18.1 MMcfe/d, 245 b/d of oil and about 1,230 Btu per standard cubic foot (scf) of gas. Meanwhile a second well, Chalfant 1-7H, had an IP rate of 16.2 MMcfe/d, 375 b/d of oil and about 1,190 Btu/scf of gas.

A third highlighted well — Green Acres 1-36H, drilled in Grady County, OK, in the SCOOP’s oil window — averaged 980 boe/d during the first quarter, with 78% weighted toward oil.

“As you can see, the exploration program continues to be successful,” Bott said.

During the question-and-answer session with analysts, Bott said the company was continuing its efforts to reduce well costs in the Bakken and in the SCOOP area. Actual well costs in the latter play were $9.0 million for a standard one-mile lateral; the company’s goal by the end of 2014 is to reduce the cost to $8.7 million.

“We’re seeing some positive signs in the supply chain for those additional completion designs,” Bott said. “We’re optimistic that cost savings will be applied to this testing program and into designing any new designs that come out of that. For us the most important thing is that whatever we decide to do that we apply what you’ve seen us do over the past several years, and we make sure that [it] is scalable and we’re able to drive down cost.”

Bott said it was too early to tell if the EUR model of 603,000 boe at Hawkinson should be adjusted.

“The database for us…is really very sparse, even on an industry basis,” Bott said. “There’s a lot of options out there that people have been testing, and a lot of those have been successful. But they haven’t had a long production history. So if you’re going to change an EUR model, you really need to have enough production history to look forward and be able to predict what that decline curve is going to do.”

Continental reported net income of $226 million for the first quarter ($1.22/share), a 69.9% increase over the $133 million (72 cents/share) from the preceding first quarter. Excluding items typically excluded from published analyst estimates, adjusted net income for 1Q2014 was $272 million ($1.47/share), a 19.3% increase over the $228 million ($1.23/share) in adjusted net income recorded for 4Q2013.