Continental Resources Inc. has asked the Oklahoma Corporation Commission (OCC) to order the state’s natural gas producers to reduce their output in order to relieve the oversupplied domestic gas market.
The OCC scheduled a technical conference for April 17 and a hearing for May 5 to consider the request by the Enid, OK-based producer. CEO Harold Hamm was out of the country on Tuesday, but a spokesman told NGI that the filing was not new; it was made in the past few weeks.
Oklahoma operators are authorized by the OCC to produce gas at up to 65% of the maximum open flow rate of a well, or 2 MMcf/d, whichever is greatest. Continental Resources wants the rate cut to 25% of the maximum, or 1 MMcf/d.
“There’s no reason for wasting a valuable resource for nothing,” Hamm recently told The Oklahoman.
The OCC, which reviews the open gas flow rates for wells twice a year, last considered the rates on Jan. 29. At that time OCC staff testified that the overall demand for gas “remains greater than the overall ability of wells” in the state to produce. However, the gas market has since deteriorated, Hamm told the newspaper.
“This filing is more for the industry than it is for our company,” Hamm said. “We felt this was enough of an urgent matter that we should have a special hearing on it.”
Continental is an oil-weighted producer, but it has considerable gas operations onshore, including a sizable leasehold in Oklahoma. In the Arkoma Basin’s Woodford Shale play, where it has around 47,000 net acres, Continental exited 2008 averaging 26.4 MMcf/d, which was three times greater than the average production of 8.4 MMcf/d in December 2007. The company controls another 117,000 net acres of the Woodford Shale in the Anadarko Basin, and it has about 28,000 net acres in the emerging Atoka Shale play, which is also in the Anadarko Basin.
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