Oklahoma City’s Continental Resources reported its 2018 net income missed $1 billion by only $12 million, enough that it’s earnings were $2.64 per diluted share.
The company said its adjusted net income for the year was $1.07 billion or $2.84 per diluted share. Fourth quarter net income came to $198 million or 53-cents per diluted share. But the quarterly adjusted net income was $202 million or 54-cents a share and it missed the predicted income by 7 cents a share.
“2018 was a breakout year of performance for Continental with significant cash flow generation and debt reduction, as well as corporate returns that compare favorably against our peers and are competitive with other industries,” said Harold Hamm, Chairman and Chief Executive Officer. “In 2019, we will continue to deliver strong corporate returns coupled with growth that can adjust to various market conditions.”
He said daily fiscal year 2018 production was 298,190 Boepd, an increase of 23% over Fiscal Year 2017. Oil production was up 21% at 168,177 Bopd for the year.
The company also reported it managed $585 million total debt reduction for the year, leaving $5.77 million total debt and $5.49 billion in net debt as of December 2018.
Year-end 2018 oil reserves were up 18% over 2017.
In the Bakken, Continental’s production increased 10% in the fourth quarter over the third quarter of 2018. The company also completed 52 gross operated wells with first production flowing at an average initial 24-hour rate per well of 2,800 Boe per day.
“Continental has entered a new era of optimized full field development in the Bakken where technology and operational efficiencies have uplifted performance across the play,” said Jack Stark, President. “As we look to 2019 and beyond, the Bakken will continue to underpin Continental’s sustainable, value-driven and oil-weighted growth.”
Fourth quarter production in the STACK grew by 12% over the third quarter and 31% over the fourth quarter of 2017. Nineteen gross operated wells were completed with first production flowing at an average initial 24-hour rate per well of 3,645 Boe per day.
The Company recently completed another Meramec unit in the over-pressured condensate window of STACK. The Boden unit flowed at an impressive combined initial 24-hour rate of 14,071 Boe per day, averaging 1,197 Bo per day per well and 20,961 Mcf per day per well.
“Recent results from the Boden unit further validate Continental’s optimized density development and the high quality of the over-pressured Meramec that underlies our acreage position in STACK,” said Gary Gould, Senior Vice President of Production & Resource Development.
SCOOP production in the fourth quarter grew by 6% over the third quarter of 2018 and was 8% higher than the fourth quarter of 2017. Seventeen gross operated wells were completed in the fourth quarter resulting in a 47% increase in oil production over the fourth quarter 2017.
As previously announced in the Company’s Project SpringBoard conference call, Project SpringBoard is expected to add 10%, or 16,500 barrels of oil per day, to the Company’s total net oil production from third quarter 2018 to third quarter 2019.
In fourth quarter 2018, Project SpringBoard production growth was on pace, producing an average 5,260 barrels of oil per day. The Company currently has 45 gross operated wells waiting on completion in Project SpringBoard with 18 gross operated wells in the Springer reservoir and 27 gross operated wells in the Woodford and Sycamore reservoirs.
Approximately 12 rigs will be focused on Project SpringBoard in 2019, with approximately 7 rigs targeting the Springer and approximately 5 rigs targeting the Woodford and Sycamore.