CLR: Springer Shale in Oklahoma

[dan_s]

Continental’s find is the Springer Shale, in the heart of the SCOOP play.

The company’s first discovery well, named the Wilkerson 1-20H, was completed in January 2013. The well returned an initial production (IP) rate of 2,038 BOEPD. Continental responded by drilling two more wells in the Springer’s oil window. The Ball 1-19H, a stepout well drilled 25 miles to the southeast, served as a delineation test and returned an IP rate of 1,037 BOEPD. The Birt 1-13H was drilled near the Wilkerson and produced an IP rate of 793.

CLR opted to go stealth, keeping quiet on its find and making land acquisition its priority. Since 2012, the company has boosted its SCOOP acreage by 540% and now holds 195,000 net acres. A total of 11 wells have been completed to date, with the highest IP registering at 2,133 BOEPD. The 11 Springer wells, on average, are returning IPs of 700 BOEPD and a type curve of 940 MBOE – sufficient for a 100% rate of return at costs of $9.7 million per well. The Wilkerson has produced a cumulative total of 300 MBOE in its first 20 months of production.

http://www.oilandgas360.com/oklahoma-co ... d-26401157

[dan_s]

Since the Springer Shale is above the Woodford, all previously drilled Woodford wells provide a “free look” into the Springer, according to CLR management. Additionally, the company can list two formations as held-by-production with a single wellbore. “We got a two-for-one,” said Parker. “We bought one shale and got another one for free.”

CLR previously had one rig running in the Springer. By the end of 2014, they’ll have eight, and its first drilling density test (on 128 acre spacing) is underway. Under its current program, the company has 11 to 12 years of drilling inventory focused solely on the oil window.

[dan_s]

The South Central Oklahoma Oil Province, or SCOOP, was estimated by CLR at the beginning of the year to hold as much as 70 billion barrels of oil. Matt Portillo, managing director of equity and research for Tudor, Pickering, Holt & Co, expects the play’s production to reach 100 MBOEPD by 2018.

CLR management mentioned a handful of other formations as potential add-ons to its current progress, including the Northwest Cana and the Meramec “STACK.” The Meramec, known by some throughout the industry as the SOHOT play, was identified as a core play by Unit Corporation (ticker: UNT) in May 2014. The company’s first well in the area averaged 1.1 MBOEPD for its first 30 days and has returned 115 MBOE through its first 115 days of production, according to its Q2’14 release.

Unit Corp's CEO Larry Pinkston is speaking at our next luncheon in Houston on September 30.

Newfield Exploration (NFX) also has a large acreage position and is actively drilling in the STACK play.

[dan_s]

Continental Resources upgraded to BUY by Global Hunter Securities

[jb2257]

I guess the good news is that it's going down on low volume instead of the massive volume yesterday.

[dan_s]

Everything is down today on lower oil prices, so this dip in CLR is not a continuation of yesterday's selloff. I know that may not be comforting, but it is always good to look at the whole group. They do react to changes in oil & gas prices. Probably more than they should when you consider these companies have a lot of their production hedged. [BTW CLR is going to report a huge gain on their derivatives this quarter.]

CLR is going to be fine. They are on-track to increase production 25% to 30% annually for many years to come. That is incredible growth for a company of this size. Increasing production and proven reserves is what makes any E&P valuable.

[Lemonhawk]

Was large volume a post split sell off?

[setliff]

well, it was a sell off and it did happen after the split. but the split was not the reason for the selloff.