Continental Resources (CLR) Capex Budget for 2017

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OKLAHOMA CITY, Jan. 25, 2017 /PRNewswire/ -- Continental Resources, Inc. (CLR) (the "Company") today announced a 2017 capital expenditures budget of $1.95 billion, which is expected to accelerate production growth in second half 2017 to an exit rate of 250,000 to 260,000 barrels of oil equivalent (Boe) per day. Crude oil is projected to account for approximately 59% of total production by year end, compared with approximately 55% in the fourth quarter 2016.

Fourth quarter 2016 production averaged approximately 210,000 Boe per day, reflecting persistent severe weather in North Dakota since late November 2016. The Company expects production to range between 210,000 and 215,000 Boe per day through first half 2017, after which production is expected to significantly accelerate due to the timing of pad completions in the Bakken and six new multi-well density projects in the over-pressured oil window of Oklahoma's STACK play.

Full-year 2017 production is expected to average approximately 220,000 to 230,000 Boe per day, compared with approximately 217,000 Boe per day for 2016.

Of the total $1.95 billion budget, the Company is allocating $1.72 billion to drilling and completion activities, with the remainder planned to be invested in other opportunities including leasehold and facilities.

More than 80% of the drilling and completion budget is focused on completing the Company's deep inventory of uncompleted wells in North Dakota, additional drilling in the Bakken, and further STACK development, which will drive the 2017 increase in crude oil volumes as a percent of total production. Crude oil production is expected to grow to approximately 150,000 barrels of oil (Bo) per day by year-end 2017, a 29% increase compared with approximately 116,500 Bo per day for fourth quarter 2016. Natural gas production is expected to increase to approximately 630 million cubic feet (MMcf) per day at year-end 2017, an approximate 12% increase over fourth quarter 2016.

The capital budget is projected to be cash neutral for full-year 2017 at an average $55 per barrel NYMEX WTI and $3.14 per thousand cubic feet (Mcf) of natural gas Henry Hub. Continental noted that, at a full-year average $60 per barrel WTI price, the Company would expect to generate approximately $200 million in additional cash.

Budgeted completed well costs reflect further enhancements in completion designs and potential increases in service costs, partially offset by drilling efficiencies and lower drilling day rates as long-term rig contracts expire.

Continental intends to adjust the level of spend if necessary to remain cash neutral for the year. It also continues to target reducing long-term debt to $6 billion or lower using proceeds from the potential sale of non-strategic assets.

2017 Operating Plan

Continental plans to operate an average 20 drilling rigs in 2017, an increase of one rig from 2016. The Company expects to complete a total of 280 gross (178 net) operated wells with first production in 2017. The Company also plans to participate in completing 40 net non-operated wells in 2017, 35 of which will be in the Bakken.

The Company plans to complete 131 gross (100 net) operated wells out of its Bakken uncompleted well inventory with first production commencing by year end. In addition, Continental plans to complete with first production approximately 17 gross (8 net) newly drilled Bakken wells in 2017. At year-end 2017, the Company expects to have 140 Bakken wells in inventory, of which 72 gross (40 net) wells will have been completed but waiting on first sales and 68 gross (47 net) operated wells will be waiting on completion.

In Oklahoma, the Company expects to complete 132 gross (70 net) operated wells with first production in 2017, including 98 gross (50 net) operated wells in STACK and 34 gross (20 net) operated wells in SCOOP.

Outlook for 2018 and Beyond

The Company projects its current inventory will support an average annual production growth rate of more than 20% in 2018 to 2020 at $60 to $65 per barrel NYMEX WTI oil prices and remain cash neutral. At these prices the Company expects to deliver a 2018 exit rate of 290,000 to 310,000 Boe per day, which is an increase of approximately 18% over the projected 2017 exit rate (midpoint to midpoint). Continental expects crude oil production will continue increasing at an accelerated rate, accounting for 60% to 65% of total production in years after 2017.