Continental Resources Inc. says a shale-oil discovery in Oklahoma may add the equivalent of 1.8 billion barrels of crude to the company’s reserves as it drills more than 2,000 wells in coming years.
The South Central Oklahoma Oil Province, or SCOOP, lies beneath oilfields that began producing crude as early as 1905.
The geology of the discovery is similar to the Bakken Shale region in North Dakota and Montana, where Continental is the largest holder of drilling rights, according to the presentation.
The company has been quietly amassing drilling leases in the SCOOP since at least 2010 and now holds 170,600 acres. The wells Continental has so far drilled in the SCOOP have cost about $9 million apiece.
Continental is exploring for crude in two other “stealth” prospects in the U.S., company President Rick Bott said during the presentation. He declined to identify the location or estimated size of the fields.
The company plans to spend $136 million to explore those prospects in 2013, or about 4 percent of Continental’s capital budget.
The company also has a leading presence in the Anadarko Woodford Play of Oklahoma and the Red River Units Play of North Dakota, South Dakota and Montana.
Founded in 1967, Continental’s growth strategy has focused on crude oil since the 1980s. The company reported total revenue of $1.6 billion for 2011 and is on track to triple production and proved reserves from 2009 to 2014.
According to its longer-term strategic growth plan, the company plans to generate average production of 300,000 barrels of oil equivalent per day in 2017.
The company reported average production of 94,852 Boepd in the second quarter.
Continental officials said they expect oil differentials will average in a range of $8 to $11 per barrel in 2013. The company expects its liquids-rich natural gas production will have an average premium of $1.00 to $1.50 per Mcf.
Continental is determined to expand production to 108 million barrels of oil equivalent by 2017 — a marked increase from mid-2012’s estimate of 36 million. This large growth is expected to arrive mainly from the Bakken fields.
The company’s proven reserves, currently at 610 million barrels of oil equivalent, is also expected to increase threefold by 2017.
Continental expects annual production growth of 30 to 35 percent in 2013. For the second quarter of this year, Continental’s average production was 94,852 BOE per day. Estimates for 2013 depend heavily on the completion of 300 net wells accompanied by capital outlays of up to $3.4 billion.
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