Continental Resources Inc. has successfully completed its second natural gas well in the Anadarko Woodford play, while the company's production total continued to rise during 4Q2011.

Continental, an independent oil and gas exploration and production company based in Enid, OK, said its Lyle 1-30H well had flowed 7.1 MMcf/d of natural gas and 325 b/d of oil during its initial one-day test period. The well is located in Grady County, OK.

The company said the new Lyle well is located four miles southeast of its Lambakis 1-11H well, which it announced in August 2011. During its initial one-day test period, Lambakis flowed 5.4 MMcf/d and 160 b/d.

While Continental conceded that it was too early to determine the estimated ultimate recovery (EUR) for the Lyle well, the company believes it should be comparable to the Lambakis well, which has an EUR in excess of 9 Bcfe, or 1.5 million boe. The company said that since May 2011, the Lambakis well has produced a cumulative 827 MMcf and 19,300 bbl.

Continental said it is drilling an additional well four miles southeast of the Lyle well in order to better determine the production capacity of its approximately 96,000 net acres in the liquids-rich Southeast Cana project.

The company said production results from October, coupled with preliminary production results from November, indicate that it is poised to report average production of at least 73,000 boe/d for 4Q2011. If that total is realized, Continental would exceed the upper end of its 2011 guidance of 39% growth for the year. By comparison, the company reported average production of 66,289 boe/d for 3Q2011.

"The Bakken of North Dakota and Montana continues to drive our growth," said CEO Harold Hamm. "We are also seeing increased Anadarko Woodford production, with a focus on the higher-liquid portions of the play in Blaine and Grady counties."

Continental said that during 4Q2011 it has completed 46 gross well in the Bakken Shale -- 39 in North Dakota and seven in Montana. Of those wells, 24 in North Dakota produced at least 1,000 boe/d during their initial one-day tests.

The company also said its capital expenditures for 2011 will total approximately $2 billion, with production and lease acquisitions representing an additional $150 million. Continental acquired oil and gas leases from a Bureau of Land Management sale on July 12, about one month after Hamm said in a radio interview that the company believes the Bakken contains a potential 24 billion boe (see Shale Daily, July 20; June 10).

Continental said it plans to begin implementing a more efficient pad drilling design in 2012, when it forecasts more of its Bakken acreage will be held by production. The new design, expected to reduce well costs by about 10%, calls for drilling four wells on two adjoining 1,280-acre spacing units from a single drilling pad.

According to company reports and NGI's Shale Daily calculations, Continental Resources is the largest acreage holder in the Bakken with 901,098 net acres. The top five is rounded out with Hess Corp. (900,000), Whiting Petroleum (682,839), EOG Resources (600,000) and ConocoPhillips (460,000).

Additionally, NGI's Shale Daily Unconventional Rig Count shows that drilling activity in the Bakken/Sanish/Three Forks play has increased 28% over last year, from 159 to 203 rigs. Drilling in the Cana-Woodford has also been on the upswing, with 63 rigs in the play in the week ending Dec. 23, up 21% from 52 rigs last year.