Encouraged by "outstanding" STACK well results, Continental Resources on Thursday increased its 2016 production guidance by 5,000 boe/d to 210,000-220,00 boe/d and expects to exit the year with production at 195,000-205,000 boe/d.
Production from STACK now represents 7% of Continental's total production, and it could add as much as 25% to the company's net unrisked resource potential, COO Jack Stark said during a conference call with analysts.
"It's hard to believe that it was only one year ago that we announced the completion of our first Meramec well in STACK [see Shale Daily, Aug. 6, 2015]. Since then, we have completed 15 operated Meramec wells, derisked more than 300 square miles of the play successfully tested three Meramec zones, demonstrated excellent repeatability, reduced drilling times by more than 40%, reduced well cost by approximately 20%, applied enhanced completions to boost recoveries, and today we're in the process of completing the first density pilot, including microseismic monitoring to assess the effectiveness of our stimulations," Stark said.
"On top of all this, we also added approximately 47,000 net acres of STACK leasehold during the past year, bringing our total leasehold position to 183,000 net acres as of June 30. Most of this was low cost, legacy acreage and approximately 60% will be held by production by year-end 2016. We currently have 11 operated rigs drilling in the play, with 17 Meramec and nine Woodford wells completing or waiting on completion."
Continental completed five Meramec wells in STACK in 2Q2016, four in the over-pressured oil window and one in the over-pressured natural gas window, Stark said.
There was also good news out of the SCOOP Woodford, where Continental increased its expected estimated ultimate recovery for wells drilled in the oil window by 30% to 1.3 million boe.
Continental said it will sell to an undisclosed buyer about 29,500 net acres of non-strategic leasehold in the SCOOP play in Oklahoma for $281 million. "Located primarily on the eastern side of SCOOP, the leasehold represents approximately 550 boe/d of net production," Continental said. "After this transaction, the company will retain approximately 384,000 net acres of leasehold in SCOOP."
Continental's 2Q2016 natural gas production was 518 MMcf/d, compared with 460 MMcf/d in 2Q2015, and oil production was 133,044 b/d, compared with 149,897 b/d in 2Q2015. An overall net production decline -- 20 million boe, about 3% less than in 2Q2015, was concentrated in the Bakken, where Continental continues to increase its drilled but uncompleted well inventory.
And, despite the positive news about its well results, the Oklahoma City-based exploration and production company reported -- as it did in the previous quarter (see Shale Daily, May 6) -- a net loss in 2Q2016. Continental posted a net loss of $119.4 million (minus 32 cents/share) for 2Q2016, compared to a net gain of $403,000 (unchanged) for the year-ago quarter and a net loss of $139.7 million (minus 38 cents/share) in 4Q2015.
Continental CEO Harold Hamm, who introduced Republican presidential candidate Donald Trump at an energy event in Bismarck, ND, earlier this year (see Shale Daily, May 27), was named to Trump's economic advisory team Thursday. Hamm served as energy adviser to Mitt Romney's failed presidential candidacy in 2012 (see Daily GPI, June 13, 2012).
Stay up to date on 2Q16 earnings and projections for the remainder of the year with NGI's Earnings Call and Coverage sheet.