Continental again raises 2022 production guidance, capital program
Continental Resources Inc., Oklahoma City, has increased its 2022 annual oil production guidance to 200,000-210,000 b/d of oil from 195,000-205,000 b/d inclusive of production from a completed deal to acquire Wyoming Powder River basin assets from Samson Resources II LLC (OGJ Online, Mar. 15, 2021).
The company is projecting a December 2022 oil production exit rate of about 220,000-230,000 b/d and updating its 2022 annual natural gas production guidance to 1,100-1,200 MMcfd from 1,040-1,140 MMcfd.
The update, ahead of the company’s official first-quarter 2022 earnings report scheduled for May 4, projects first-quarter total production averaged 373,800 boe/d (oil production of 194,800 b/d and natural gas production of 1,074 MMcfd).
Capital
A modified 2022 capital program of $2.6-2.7 billion from $2.3 billion is expected to increase the company’s projected return of capital employed by 2% over its original 21% at $80 WTI and $3.50 Henry Hub. The increase is on the heels of 47% spending increase in February (OGJ Online, Feb. 22, 2022). Adjusting for current commodity prices, the projected return on capital employed is increasing to about 31% in 2022.
Continental is projecting a 40% or lower reinvestment rate, versus about 45% in the original capital program. Within the modified spend, the company is allocating $100-125 million to activity related to a newly closed bolt-on acquisition in the Permian. The company added over 75,000 acres to its Permian basin position in addition to its $3.25-billion entrance deal with Pioneer Natural Resources in November 2021 (OGJ Online, Nov. 4, 2021). In a February investor presentation, the company noted 2022 drilling and completion spend for Permian assets of $400 million, with 46 total net wells and an average of four rigs running.
In the update ahead of the earnings call, Continental said $100-150 million is earmarked to outside operated spending. Some $100-125 million is expected to go toward inflation and securing quality rigs and crews for future years.
Mikaila Adams | Managing Editor - News
Mikaila Adams has 20 years of experience as an editor, most of which has been centered on the oil and gas industry. She enjoyed 12 years focused on the business/finance side of the industry as an editor for Oil & Gas Journal's sister publication, Oil & Gas Financial Journal (OGFJ). After OGFJ ceased publication in 2017, she joined Oil & Gas Journal and was named Managing Editor - News in 2019. She holds a degree from Texas Tech University.
