Six months after cutting its rig count in half, Continental Resources Inc. made record production for the second quarter and raised its production guidance for the rest of the year, but the company said it plans to drop two of its 10 operated rigs deployed in the Bakken Shale if commodity prices don’t improve, and will increase its focus on the Midcontinent.

On Wednesday, the Oklahoma City-based independent said 2Q2015 production totaled 226,547 boe/d, a 9.5% increase over the preceding quarter (206,829 boe/d) and a 34.9% increase over 2Q2014 (167,953 boe/d). It subsequently raised its production growth guidance from 16-20% to 19-23%, and said it expects to exit 2015 producing 210,000-215,000 b/d.

“That’s quite impressive considering we reduced our rig count by 50% from 4Q2014,” COO Jack Stark said during an earnings conference call Thursday (see Shale Daily, Feb. 25; Dec. 23, 2014).

Stark attributed the quarter’s record production to enhanced completions in the Bakken — most of which are using slickwater and hybrid designs — increased production in the Woodford and Springer shale portions of the South Central Oklahoma Oil Province (SCOOP), and momentum coming out of 2014.

Continental currently has 25 operated rigs; 10 are deployed in the Bakken, 10 in the SCOOP, four in the Northwest Cana joint development area, and one in the STACK, a multi-horizon oil play in the Anadarko Basin in Oklahoma.

“We plan to keep approximately 25 rigs drilling throughout year-end but are prepared to reduce the rig count in the Bakken by 20% should today’s low prices persist,” Stark said.

Although production has grown, Continental said it expects it to level off and decline slightly through the rest of the year. Gary Gould, Continental senior vice president for operations, said production is expected to increase in the plays that make up the company’s south region, which include SCOOP, Northwest Cana and the Arkoma Basin.

“Overall for the company, our production will be declining in the Bakken, but it will be moving up in the south,” Gould said Thursday. “We’ve got higher rate of return projects in the south. We’ve got opportunities with HBP [held by production] acreage in the south, and so that’s why we want to focus more of our growth in the south right now than in the north.

“I think you’re going to see that throughout the Bakken play. Overall, production in the Bakken will be dropping off over time for all operators.”

Continental highlighted the first well it completed in the STACK play, targeting the Meramec reservoir. The Ludwig 1-22-15XH well, located in Blaine County, OK, tested at an initial production rate 2,076 boe/d — which included 1,580 b/d of oil and 3.0 MMcf/d of natural gas — from a 9,711-foot lateral.

“It indicates that STACK constitutes a significant new resource play underlying our 136,400 net acres in the STACK play,” Stark said.

Continental reported net income of $0.4 million (0 cents/share) for 2Q2015, compared to $103.5 million (28 cents/share) for 2Q2014. Adjusted net income totaled $48.5 million (13 cents/share) for 2Q2015, compared to $277.1 million (75 cents/share) for the previous second quarter.

On Wednesday, Phillip Jungwirth of BMO Capital Markets Corp. said in a note that the firm “continues to view Continental’s operational efficiency and asset quality as underappreciated and like its peer-leading cash margins…”

Meanwhile, Jefferies LLC said Wednesday that it was “concerned about Continental’s rising revolver balance — $1.23 billion drawn against its $2.5 billion credit facility — given our knowledge that banks will be much tougher on lending standards in the coming quarters. Liquidity is not robust, with only $1.3 billion remaining on the facility.”