Why is CLR down this morning?

[dan_s]

Sept 17 (Reuters) - Continental Resources Inc plans to spend $500 million more this year than initially forecast on pricey well techniques in North Dakota's Bakken shale formation and a new project in Oklahoma, though the company tempered 2014 production expectations.

The new projections, unveiled the day before the company's analyst meeting on Thursday, highlight the increasing competition and cost to find and develop energy reserves, even in the North American shale industry.

Continental plans to spend $4.55 billion this year, up from a previous forecast of $4.05 billion. Much of the spending will be in North Dakota, where the company has increased the amount of proppant, or sand, it uses in each well and has combined two emerging hydraulic fracturing techniques, efforts it hopes will increase well production by 25 percent by next year.

The new processes boost Continental's cost per well to $10 million, about $2.5 million higher than levels at the end of 2013 and a stark contrast to the trend across most U.S. shale plays to lower costs.

The company also said it has found a new shale play, the Springer Shale, in Oklahoma, and has begun producing there.

Continental cut the top end of its 2014 production forecast range, now expecting oil and gas output 27 percent to 30 percent higher than 2013. The company previously told Wall Street that 2014 production should be 26 percent to 32 percent higher than last year.

For 2015, Continental expects spending to jump further, forecasting a $5.2 billion budget.

[dan_s]

OKLAHOMA CITY, Sept. 17, 2014 /PRNewswire/ -- Continental Resources, Inc. (the "Company") (CLR) plans to conduct its 2014 Investor and Analyst Day meeting tomorrow, Thursday, September 18, 2014 at 8:00 a.m. CT. An audio webcast and presentation materials will be available before 8:00 a.m. CT on the day of the event and can be found on the Company's website at www.CLR.com in the Investor Relations section. Topics to be covered during the event include:

Bakken:
•Detailed geologic and reservoir studies suggest Continental's Bakken net unrisked resource potential totals approximately 4.1 billion Boe (barrels of oil equivalent), in addition to the Company's proved developed reserves of approximately 240 million Boe (MMBoe).
•Successful well density tests conducted during 2013 and 2014 indicate optimal well density for full development of the Bakken Petroleum System on average should include seven to nine wells in the Middle Bakken Formation (MB), seven to nine wells in the Three Forks One Formation (TF1) and three to five wells in the Three Forks Two Formation (TF2) in each of their productive fairways.
•The Company executed an expansive enhanced completion program across its vast leasehold position in the Bakken. Early results suggest an approximate 25% uplift in production and similar potential uplift to economic ultimate recovery (EUR). The Company is seeing the most favorable results utilizing a hybrid completion design, which includes greater proppant volume (approximately 200,000 pounds per stage) and a combination of slickwater and crosslinked gel fluids. [This is great news for those of you that own EMES and HCLP. - Dan]

SCOOP:
•Based on additional leasehold acquired and two years of delineation and exploration drilling, Continental estimates its South Central Oklahoma Oil Province (SCOOP) net unrisked resource potential has increased to approximately 3.6 billion Boe, nearly the size of its Bakken opportunity. [This is FANTASTIC news. - Dan]
•The updated SCOOP Woodford type curve EUR is 1.725 MMBoe in the condensate fairway and 655 thousand Boe (MBoe) in the oil fairway. Both are based on a 7,500 foot horizontal lateral length. [An "Estimated Ultimate Recovery" (EUR") over a million boe is a great well. Very few wells in the Bakken or Eagle Ford are this good. - Dan]

Exploration Discovery: Springer Shale
•Continental's exploration team does it again – the Company is announcing a new oil discovery, the Springer Shale, located in the heart of the SCOOP.
•The original discovery well and two subsequent confirmation wells have cumulative production of approximately 640 MBoe in the 20 months following the original discovery well. Continental currently has 11 producing wells in the oil fairway of the Springer Shale with an average 24-hour initial production (IP) rate of 1,140 Boe per day and an average 30-day IP of 700 Boe per day.
•Initial Springer Shale oil fairway production data suggests an EUR of 940 MBoe, with 67% oil and 17% natural gas liquids, for an average 4,500 foot lateral length.

2014 and 2015 Guidance:

With the success of the enhanced completion testing program in the Bakken and the exceptional returns achieved in the new Springer Shale oil discovery, the Company is accelerating drilling and completion capital expenditures in the second half of 2014 for a total full-year estimate of $4.55 billion in 2014 and $5.2 billion in 2015. Going forward, a majority of the Company's Bakken wells will incorporate enhanced completions, and completed well costs are expected to average approximately $10 million per well. This is an increase of approximately $2 to $2.5 million above the Company's standard completion design cost from year-end 2013. The Company plans to average eight operated rigs in the Springer Shale for the remainder of the year, an increase from just one rig earlier in the year. This acceleration will have limited impact on overall 2014 production results, given only a quarter of the year is remaining and the lag between capital expenditure and resulting production. However, the Company estimates exiting 2014 at net production of approximately 200 MBoe per day, an increase from previous internal projections.

I am working on the CLR forecast model and will post an update under the Sweet 16 tab shortly. - Dan

[setliff]

this explains wll and oas weakness.

[jb2257]

That took the whole sector down.