Continental Resources, Inc. expects to increase total crude oil and natural gas production in a range of 26% to 32% in 2014, based on non-acquisition capital expenditures of $4.05 billion. Continental expects average daily production in 2014 will be in a range of 170,000 to 180,000 barrels of oil equivalent (Boe) per day, with an exit rate for December 2014 of approximately 200,000 Boe per day.
Total production for 2014 is expected to be 70% crude oil, in line with the Company's mid-year 2013 results and the long-term commitment to tight oil resource plays. Benefiting from recent reductions in well costs, Continental's 2014 budget reflects 400 net well completions (1,090 gross), with 94% located in the Company's two key operating areas, the Bakken in North Dakota and Montana and the South Central Oklahoma Oil Province (SCOOP). The 2014 well count represents a 22% increase over current budgeted completions of 329 net wells in total for 2013.
"Achieving our 2014 goals will be an excellent 'Year 2' in our five-year plan to triple production and proved reserves," said Harold G. Hamm, Continental Chairman and Chief Executive Officer. "We remain focused on our industry leadership in oil production growth, low well costs, and capital efficiency. We're on track to achieve our five-year growth plan while funding an increasing percentage of capital expenditures with internally generated cash flow."
Exploration drilling accounts for approximately $500 million of 2014 capital expenditures, a 16% increase over 2013's exploratory drilling budget. Exploration activity will focus primarily on continued density drilling tests in the Bakken, further testing of the lower Three Forks formation in the Bakken, and further appraisal and a density spacing test in SCOOP.
"Our exploration program is providing essential data we need to optimize spacing and transition to full-field development," said W. F. "Rick" Bott, President and Chief Operating Officer. "We are executing our growth plan with a high degree of consistency, accelerating the value of our long-term, repeatable drilling inventory. Multi-well pad drilling in the Bakken will drive additional efficiencies as we continue to expand the play geographically and vertically with the lower Three Forks benches.
"Finally, Continental's growth plan for 2014 continues the focus on capital discipline that has been a key part of our 2013 results, and the Company has set a new goal to reduce average operated Bakken completed well costs in a range of 3% to 5% by the end of 2014."
Continued Leadership in the Bakken, More Growth in SCOOP
Drilling-and-completion related activities account for $3.5 billion of the 2014 capital expenditures budget. Continental has allocated 71% of its 2014 drilling capital expenditures budget to the Bakken play, with an average operated rig count of 21 rigs next year, one more than the current total. Next year the Company plans to operate 17 rigs in the North Dakota portion of the play, and four in Montana. The Company plans to complete or participate in completing 300 net wells (886 gross) in the Bakken in 2014.
The Company has allocated 25% of its 2014 drilling capital expenditure budget to its SCOOP operations, which has generated excellent rates of return. The Company is planning to have an average of 18 operated rigs in the play in 2014, compared with the current count of 10 operated rigs. Based on increased rig count and continued improvements in drilling efficiency, the Company expects to complete or participate in completing 74 net wells (167 gross) in SCOOP in 2014. "Operational goals in SCOOP include improved drilling times and an increased number of extended-lateral wells," Mr. Bott said. Activity in the play will focus on holding acreage by production and further de-risking the southern areas of the play. The Company also plans to initiate a density drilling program where it has already de-risked the play.
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