Continental nearly doubles Bakken reserves

Continental Resources Inc., Oklahoma City, the top producer and leaseholder in the Williston basin Bakken play, said it increased its yearend 2012 proved reserves 54% to 785 million bbl of oil equivalent, 72% oil.

With the 2012 increase, Continental said, it has grown its proved reserves 45%/year since the end of 2009.

Crude oil accounted for 64% of the company’s 508 million boe of yearend 2011 proved reserves. The company brought the percentage up despite two crude oil concentrated divestitures in 2012.

Through acquisitions and leasing, Continental increased its Bakken leasehold by 24% to 1,139,799 net acres at the end of 2012 from 915,863 net acres a year earlier.

Continental’s 2012 proved reserves in the Bakken totaled 564 million boe, almost double proved reserves in the play at the end of 2011.

Other main components of yearend 2012 proved reserves included the South Central Oklahoma Oil Province, with proved reserves of 63 million boe, and the Williston basin Red River units, where proved reserves increased in the past year to 78 million boe.

Exploration and development were the main drivers of the company’s 2012 proved reserves growth, adding 234 million boe of proved reserves in the year, of which 27% were proved developed producing and the remainder proved undeveloped. Acquisitions added 82 million boe, and revisions accounted for 50 million boe.

Continental produced 35.7 million boe in 2012, 58% more than in 2011.

Fourth quarter 2012 production was an estimated 9.8 million boe, or 106,831 boe/d, 42% more than fourth quarter 2011 output. The quarter was the 19th straight in which Continental has increased production from the immediately previous quarter.

The company deferred some fourth quarter well completions to stay within its 2012 capital budget.

Pipe and rail capacity out of the basin are more than adequate presently, Continental said. The company has a 5-year plan to triple production and proved reserves by the end of 2017.

Continental in 2012 for the first time booked proved reserves in lower benches of the Three Forks formation, with the recognition of three PDPs and 11 PUDs in 2012. The company has completed two wells in the Three Forks second bench and one well in the third bench. Traditionally operators targeted the Middle Bakken zone and only the first bench of the Three Forks.

Continental has two major exploratory and appraisal programs planned for 2013. The company is testing productivity of the lower Three Forks benches with a widespread 14-well program.

It also 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 greatly impact future reserve bookings, the company said.

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