Morningstar | Continental Is Developing Unconventional Oil and Gas Resources in North Dakota and Oklahoma
Continental Resources played a key role in the early development of the Bakken Shale in North Dakota's Williston Basin, which still contains almost half of its current proven reserves (as of year-end 2017). Continental's Bakken footprint encompasses over 800,000 net acres, with a large portion in "core" counties (McKenzie, Dunn, Mountrail, and Williams). The company has demonstrated success with optimized completions over a wide area, with most recent wells tracking ahead of the firm's 1.2 million barrels of oil equivalent type curve. As these wells are relatively cheap on a cost-per-foot basis, and because Continental enjoys lower unit costs than most upstream peers, the economics are extremely attractive (WTI break-evens are around $30/barrel).The portfolio also contains a sizable position in Continental's own backyard, in Oklahoma. The firm was credited with the discovery of the South Central Oklahoma Oil Province, or SCOOP, and it still holds more than 250,000 net acres there. The Springer oil play is the most lucrative target there, and full-field development is ongoing after a hiatus during the downturn (this asset only contains a few hundred potential drilling locations, and management was reluctant to waste them by drilling during a period of low oil prices). The firm is currently focusing on "Project Springboard," a 45,000-acre project that will contain 100 Springer wells, along with 250 Woodford or Sycamore wells, when complete. Development will occur in 9-mile "rows" to maximize efficiency.The awkwardly named Sooner Trend, Anadarko Basin, Canadian and Kingfisher Counties, or STACK, play reflects Continental's latest expansion--the firm holds about 200,000 net acres there. The vast majority of this position is located in the play's overpressured zone, supporting significantly stronger flow rates and juicer economics. The oil cut varies, and a higher proportion of condensate and natural gas is expected in the southwest portion. The oil window is the main focus for now. Based on the current plan, which calls for eight wells per unit and a projected recovery of 9,600 mboe per unit, the economics are comparable with the Bakken.Continental Resources is an independent crude oil and natural gas company engaged in the exploration, development, and production of crude oil and natural gas mainly in the North, South and East regions of the U.S. The North region consists of properties north of Kansas and west of the Mississippi River and includes North Dakota Bakken, Montana Bakken, and the Red River units. The South region includes all properties south of Nebraska and west of the Mississippi River including various plays in the South Central Oklahoma Oil Province and Sooner Trend Anadarko Canadian Kingfisher areas of Oklahoma. The East region is comprised of undeveloped leasehold acreage east of the Mississippi River.
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