After a second quarter of strong production growth in the Bakken Shale and Anadarko Woodford, Oklahoma City-based Continental Resources Inc. said it is ahead of schedule on its five-year plan to triple production.

The company’s overall production was 94,852 boe/d, an increase of 76% over the year-ago quarter and 11% more than the first quarter of 2012. The company increased 2012 full-year production growth guidance to a range of 57-59%, while reducing its operated rig count to 29 rigs currently from 44 in late 2011. Crude oil represented 69% of second quarter production.

“We are significantly ahead of plan to achieve our five-year goal of tripling production from 2009 to 2014,” said CEO Harold Hamm. “We have demonstrated increasing efficiencies by delivering higher production with fewer rigs, and we expect to hit our five-year target during the first half of 2013, which is 18-24 months earlier than our original plan.”

Continental announced a 20% increase in proved reserves to 610 million boe at June 30 compared with total proved reserves of 508 million boe at year-end 2011 and 421 million boe at June 30, 2011.

The company also increased its 2012 capital expenditures budget to $3 billion, reflecting accelerated spending to drill high rate-of-return projects in the Bakken and increases in average working interests in Bakken and Anadarko Woodford wells. “We have accelerated our capital program because of the tremendous opportunities in front of us,” said CFO John Hart. “We are delivering strong production growth while maintaining favorable debt metrics.”

Drilling and completion costs were up, as they had been for other producers in the play, management told financial analysts during a conference call Thursday. Costs for operated wells are averaging $9.2 million per well, and nonoperated wells are averaging $11.3 million. “Continental continues to work with service providers to maintain its low-cost leadership through operational efficiencies, addressing supply chain issues and reducing the strain on infrastructure in this developing field,” the company said.

However, costs are beginning to improve, at least for the company’s operated rigs. COO Rick Bott said that just after the company put out its earnings press release Wednesday night, it received an email from a service provider that said it was lowering its costs for the company.

“We are seeing that,” Bott told analysts. “We’re seeing continued improvement in our cycle times. We are optimistic about what the future holds on the operated [rig] side. On the nonoperated side where we’ve seen even more pressures — we stated that on average on our nonoperated wells those costs are running in essence $2 million higher than ours — we have not seen that yet. In comparing what some of the other companies have reported, they all point to the fact that they anticipate that and they’re building that into their models, but to be real honest, we have not seen that show up yet on the invoices that we’re signing.”

Continental oil and natural gas sales were $523.4 million for the second quarter, compared with $388.8 million for the same period of 2011. Net income was $405.7 million ($2.25/share), compared with net income of $239.2 million ($1.33/share) for the second quarter of 2011, with the increase reflecting crude oil-weighted production growth.

The company reported a blended realized price of $61.69/boe composed of an average realized crude oil price of $80.56/bbl and an average realized natural gas price of $3.51/Mcf. Continental’s natural gas price differential to Henry Hub was a premium of $1.29/Mcf, reflecting the high liquids content of its natural gas. This compared with a premium of $1.16/Mcf for the second quarter of 2011.

Continental said it continues to realize strong initial per-well production rates in the Bakken, in line with expectations. Bakken production was 53,471 boe/d for the second quarter of 2012, a 97% increase over the second quarter of 2011. “The company continues to see strong production results from new wells in the Middle Bakken and Three Forks zones. Successful results continue to expand the proven extents of the play laterally, and in the coming months Continental will continue exploring lower benches in the Three Forks to expand the play vertically,” it said.

The company currently has 19 operated drilling rigs in the Bakken, a reduction from the peak of 26 operated rigs in the first half of 2012. The current rig fleet includes 15 operated rigs in North Dakota and four in Montana. Nine of the North Dakota rigs are drilling ECO-Pad projects.

“We continue to identify additional opportunities to transport Bakken oil to water borne-sourced U.S. markets that yield the highest net price per barrel at the wellhead,” Hamm said. “Demand for high-quality domestic crude, especially Bakken barrels, is increasing in all markets. We are aggressively supporting the expansion and construction of current and new pipeline systems. With infrastructure improvements like the reversal and volume expansion of the Seaway pipeline, other new pipeline construction, and expanding rail capacity, we expect the intrinsic value of the Bakken barrel to be realized over time.”

Production in the Anadarko Woodford in the second quarter of 2012 was more than four times production in the same quarter of 2011 (16,672 boe/d versus 4,031 boe/d). The company participated in 31 gross (17 net) wells in the play. In terms of Continental-operated wells, it completed 19 gross (16 net) wells in the Anadarko Woodford in the second quarter. “Initial well production rates continue to meet expectations and support this strong production growth,” Continental said.

Continental has expanded its lease position in the Anadarko Woodford play by 12.5%, with 37,559 net acres added since the beginning of 2012. Total leasehold was 315,675 net acres as of June 30.

To optimize capital, align with infrastructure timing, and maximize returns, the Company has reduced its operated rig fleet to seven in the Anadarko Woodford, compared with a peak level of 16 operated rigs in the play in late 2011. Continental plans to release one additional rig by the end of the month and is concentrating its drilling activity in the oil-rich southernmost segment of the play.

“Our overall goal is to maximize the value of our premier assets in the Bakken and Anadarko Woodford plays,” Bott said. “We are moving into full development mode, which will enable us to reduce operating costs, more efficiently develop our multi-year drilling inventory, and realize more quickly the value of our assets.”

In addition to its Woodford position, Continental holds 946,000 acres in the Bakken Shale and another 93,000 in the Niobrara, according to company reports.