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How 2Q17 Is Looking for Continental Resources

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Part 4
How 2Q17 Is Looking for Continental Resources PART 4 OF 5

What’s Continental Resources’ Production Outlook for 2017?

Production growth guidance

Continental Resources’ (CLR) 2Q17 production is expected to range between 220 Mboepd and 225 Mboepd (thousand barrels of oil equivalent per day). For fiscal 2017, the company’s production guidance range is 220 Mboepd–230 Mboepd in comparison to 217 Mboepd in 2016. The company expects to exit 2017 with a production of 255 Mboepd.

What&#8217;s Continental Resources’ Production Outlook for 2017?

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From a long-term perspective, Continental Resources expects its production to grow at a CAGR (compound annual growth rate) of 20.0% from 2018 to 2020. Oil as a percentage of CLR’s total production is expected to increase to ~60% at the end 2017. In 1Q17, oil made up 56% of CLR’s total production. The oil production mix is expected to grow to 60% to 65% of total production in the period between 2018 and 2020.

CLR noted in its 1Q17 earnings release, “We expect to achieve annual production growth of 20% from 2018 through 2020 while reducing debt below $6 billion. These plans are cash neutral each year at oil prices between $50 and $55 per barrel, reflecting strong well productivity and cost efficiency.”

CLR’s key operational highlights

Continental had 16 gross operated Bakken wells with first production during 1Q17. The company noted that all of these were completed using “optimized completion techniques,” which included increased proppant per foot, tighter stage spacing, aggressive flowbacks, and high-capacity lift technology. Fourteen of these wells are expected to average a ~75% rate of return, which is almost double the 40% rate of return originally targeted by the company’s 2017 Bakken drilling program. CLR has four operated drilling rigs in the Bakken and plans to maintain that level throughout the year.

In the SCOOP, Continental currently has five operated drilling rigs. The company plans to focus on the Springer and Sycamore regions in the SCOOP. In the Springer, CLR plans to complete up to ten wells in 2017. In the Sycamore, the company plans to drill five to seven additional wells in 2017.

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