Continental Resources Increases Proved Reserves 54 Percent To 785 MMBoe
Company's Bakken Proved Reserves Almost Double, Exceeding a Half-Billion
Barrels of Oil Equivalent
58 Percent Estimated Production Growth Achieves 2012 Target
OKLAHOMA CITY, Jan. 23, 2013
OKLAHOMA CITY, Jan. 23, 2013 /PRNewswire/ -- Continental Resources, Inc.
(NYSE: CLR) increased its year-end 2012 proved reserves to 785 MMBoe (million
barrels of oil equivalent), a year-over-year gain of 54 percent. With the 2012
increase, Continental has grown proved reserves at a compound annual growth
rate of 45 percent since year-end 2009.
Continental's 2012 proved reserves had a net present value discounted at 10
percent (PV-10) of $13.3 billion, a 45 percent increase over the PV-10 of $9.2
billion for proved reserves at year-end 2011.
Proved reserves growth in 2012 primarily reflected strong production growth in
the Bakken play of North Dakota and Montana, which Continental believes is the
nation's premier oil play. Continental is the largest producer and leaseholder
in the Bakken, with approximately 1.1 million net acres. The Company has also
accelerated production growth in its South Central Oklahoma Oil Province
(SCOOP), an oil- and liquids-rich play in Oklahoma.
Thirty-nine percent of Continental's total 2012 proved reserves, or 309.0
MMBoe, were proved developed producing (PDP), compared with 40 percent of
year-end 2011 proved reserves.
Crude oil reserves represented 72 percent of 2012 total proved reserves, a
significant increase over year-end 2011, when crude oil accounted for 64
percent of the Company's 508 MMBoe in proved reserves. The higher percentage
of crude oil proved reserves in 2012 was accomplished despite two crude-oil
Continental currently operates 85 percent of its total proved reserves,
compared with 86 percent at year-end 2011.
"We continue to increase our concentration in high-value, high-growth, crude
oil assets, especially in the Bakken," said Harold Hamm, Chairman and Chief
Executive Officer. "We are growing the value of our Bakken assets through
strategic acquisitions, exploration, and the expanded use of pad drilling,
which should improve efficiencies and translate into even better rates of
Through acquisitions and leasing, Continental increased its Bakken leasehold
by 24 percent in the past year, from 915,863 net acres at year-end 2011 to
1,139,799 net acres at year-end 2012.
The Company is also leveraging the increased demand for high-quality Bakken
crude oil at U.S. refineries. "We have more than adequate pipe and rail
capacity out of the basin at this time, so we can move our production to the
most advantageous markets," Mr. Hamm said. "Realizing the Bakken's full
potential is essential to our five-year plan to triple production and proved
reserves by year-end 2017, while increasing operating margins."
Strong Production Growth
Continental's 2012 production totaled 35.7 MMBoe, a 58 percent increase over
production of 22.6 MMBoe for 2011, in line with the Company's production
growth guidance for 2012.
Estimated fourth quarter 2012 production was 9.8 MMBoe, or 106,831 Boe per
day, a 42 percent increase over fourth quarter production for 2011. The
Company deferred some fourth quarter well completions to stay within its
capital expenditure budget for 2012. Fourth quarter 2012 was the 19^th
consecutive quarter in which Continental has increased production compared
with the immediately previous quarter.
Based on continued production growth, as well as an acquisition and a
divestiture announced December 20, 2012, Continental's current production is
approximately 116,000 Boepd.
Increased Proved Reserves
Continental's 2012 proved reserves in the Bakken totaled 564 MMBoe, almost
double proved reserves in the play at year-end 2011. The Company's Bakken
proved reserves had a PV-10 of $9.9 billion at year-end 2012.
Other significant components of year-end 2012 proved reserves included the
SCOOP play in Oklahoma, with proved reserves of 63 MMBoe (PV-10 of $955
million) and the Red River Units, where proved reserves increased in the past
year to 78 MMBoe (PV-10 of $2.0 billion).
Exploration and development activity was the primary driver in the Company's
2012 proved reserves growth, adding 234 MMBoe of proved reserves in the year,
of which 27 percent were PDP and the remainder PUDs (proved undeveloped
reserves). In total, a reconciliation of 2012 proved reserves included:
• Exploration/development 234 MMBoe (63 MMBoe PDP, 171 MMBoe
• Acquisitions 82 MMBoe
• Divestitures (8) MMBoe
• Performance revisions 50 MMBoe
• De-booking (34) MMBoe
• Price revisions (11) MMBoe
• 2012 production (36) MMBoe
Year-end 2012 proved reserves included:
• PUD locations 1,763 gross (982 net)
• Bakken PUDs 86 percent of total net PUDs
Also notable was the fact that the Company for the first time booked proved
reserves in lower benches of the Bakken Three Forks formation, with the
recognition of three PDPs and 11 PUDs in 2012. Continental has completed two
wells in the Three Forks second bench and one well in the third bench.
Traditionally operators in the play targeted the Middle Bakken zone above the
Three Forks and only the first bench of the Three Forks zone.
Ryder Scott Company, L.P. evaluated properties representing 98 percent of the
Company's proved reserves and 99 percent of Continental's PV-10 at year-end
2012, with Continental reserve engineers evaluating the remaining properties.
Continental has two major exploration/appraisal programs planned for 2013. The
Company is testing productivity of the lower Three Forks benches with a
14-well program at locations across the play. In addition, the Company has
initiated the first of four increased density pilot programs that will involve
multiple wells in the Middle Bakken and the first three benches of the Three
Forks zone, to test the appropriate density for full development. Successful
results from these programs would prove commercial productivity and could
significantly impact future reserve bookings.
The Company expects to begin reporting results from new lower-bench
productivity tests quarterly over the next 12-to-18 months.
"2012 was a good year for Continental. We completed the move of our
headquarters to Oklahoma City, and we increased our focus by selling mature
properties and redeploying capital to higher growth-rate assets," said Rick
Bott, President and Chief Operating Officer. "We have expanded our land
position, increased production, increased proved reserves, embarked on an
ambitious exploration/appraisal program, retooled our marketing efforts,
secured capital to fund our ongoing growth, and continued to build our
leadership and technical staff.
"As we begin 2013, we see multiple catalysts and opportunities to enhance the
value of our operations, particularly with these lower Three Forks programs
and further delineation of our SCOOP acreage. 2013 looks to be as exciting as
2012," Mr. Bott said.
About Continental Resources
Continental Resources is a Top 10 petroleum liquids producer in the United
States. In October 2012, the Company announced a new five-year plan to triple
production and proved reserves by year-end 2017. The Company's growth plan is
based on developing its industry-leading leasehold in the nation's premier oil
play, the Bakken of North Dakota and Montana, as well as its position in the
SCOOP and Northwest Cana plays of Oklahoma. The company reported total
revenues of $1.6 billion for 2011. Visit www.clr.com for more information.
Cautionary Statement for the Purpose of the "Safe Harbor" Provisions of the
Private Securities Litigation Reform Act of 1995
This press release includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements included in this press release other than
statements of historical fact, including, but not limited to, statements or
information concerning the Company's future operations, performance, financial
condition, production and reserves, schedules, plans, timing of development,
returns, budgets, costs, business strategy, objectives, and cash flow, are
forward-looking statements. When used in this press release, the words
"could," "may," "believe," "anticipate," "intend," "estimate," "expect,"
"project," "budget," "plan," "continue," "potential," "guidance," "strategy,"
and similar expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain such identifying words.
Forward-looking statements are based on the Company's current expectations and
assumptions about future events and currently available information as to the
outcome and timing of future events. Although the Company believes that the
expectations reflected in the forward-looking statements are reasonable and
based on reasonable assumptions, no assurance can be given that such
expectations will be correct or achieved or that the assumptions are accurate.
When considering forward-looking statements, readers should keep in mind the
risk factors and other cautionary statements described under Part I, Item 1A.
Risk Factors included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2011, registration statements and other reports filed from
time to time with the Securities and Exchange Commission (SEC), and other
announcements the Company makes from time to time.
The Company cautions readers that these forward-looking statements are subject
to all of the risks and uncertainties, most of which are difficult to predict
and many of which are beyond the Company's control, incident to the
exploration for, and development, production, and sale of, crude oil and
natural gas. These risks include, but are not limited to, commodity price
volatility, inflation, lack of availability of drilling and production
equipment and services, environmental risks, drilling and other operating
risks, regulatory changes, the uncertainty inherent in estimating crude oil
and natural gas reserves and in projecting future rates of production, cash
flows and access to capital, the timing of development expenditures, and the
other risks described under Part I, Item 1A. Risk Factors in the Company's
Annual Report on Form 10-K for the year ended December 31, 2011, registration
statements and other reports filed from time to time with the SEC, and other
announcements the Company makes from time to time.
Readers are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date hereof. Should one or more of the
risks or uncertainties described in this press release occur, or should
underlying assumptions prove incorrect, the Company's actual results and plans
could differ materially from those expressed in any forward-looking
statements. All forward-looking statements are expressly qualified in their
entirety by this cautionary statement. This cautionary statement should also
be considered in connection with any subsequent written or oral
forward-looking statements that the Company, or persons acting on its behalf,
Except as otherwise required by applicable law, the Company disclaims any duty
to update any forward-looking statements to reflect events or circumstances
after the date of this press release.
CONTACTS: Continental Resources, Inc.
Warren Henry, VP Investor Relations Kristin Miskovsky, VP Public Relations
SOURCE Continental Resources
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