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).
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.