Oklahoma City-based Continental Resources, Inc. announced Wednesday that it had a net loss of $109.6 million, or $0.30 per diluted share, during the third quarter of this year. That compares to a net loss of $82.4 million or $0.22 cents a diluted share during the third quarter of 2015.
The company’s net loss included certain items typically excluded by the investment community in published estimates, the result of which is often referred to as “adjusted net loss.” In third quarter 2016, these typically excluded items in aggregate represented $26.8 million, or $0.08 per diluted share, of Continental’s reported net loss.
While the Oklahoma City based company took a loss, it boosted production, cut capital expenditures, and reduced drilling and completion costs.
“We have expanded the productive footprint of STACK, SCOOP and the Bakken core, and are increasing the value of these assets with density testing and enhanced completions,” said Harold Hamm, Chairman and Chief Executive Officer. “The results of the Ludwig density test in STACK have given us confidence to begin development on acreage we have de-risked in the over-pressured oil window.”
“Additionally, we brought on several excellent producers in the Bakken using enhanced completion designs, including two wells that generated CLR-record 30-day initial rates for the Bakken,” said Hamm. “This is an encouraging start as the Company begins working down its large backlog of Bakken uncompleted wells and capturing their value.”
Continental’s updated 2016 guidance reflects outperformance and increased activity. The company now expects full-year production will range between 215,000 and 220,000 barrels of oil equivalent (Boe) per day, an increase of 5,000 Boe per day from the low end of previous guidance given in August 2016, and 15,000 to 20,000 Boe per day higher than the original guidance given in January 2016. Continental expects to exit the year with production between 205,000 and 210,000 Boe per day, reflecting a 10,000 Boe per day increase from the low end of previous guidance given in August 2016, according to the company’s press release.
Continental plans to increase the total number of gross operated well completions in 2016 by 32, relative to its previous plan. The company now expects to complete 119 gross operated wells with first production for the year, including 29 gross operated wells in the Bakken, 33 in SCOOP, 25 in Northwest Cana JDA and 32 in STACK Meramec.
A key milestone in the third quarter was Continental’s completion of its first density test in the over-pressured oil window of STACK. This was an eight-well Meramec density test in the Ludwig unit, including seven new wells and the original Ludwig1-22-15XH well. The combined peak 24-hour rate from all eight Meramec wells in the unit was 21,354 Boe per day. The seven new Meramec wells flowed at a combined peak 24-hour rate of 18,572 Boe per day, or 2,653 Boe per day per well, with 70% of the production being oil. The initial Ludwig well has produced 298,000 Boe (74% oil) in 338 days and continues to flow at 815 Boe per day.
The Company has 11 operated rigs in STACK, with six targeting the Meramec formation in Blaine County and five targeting the Woodford formation in the Northwest Cana area in Blaine and Custer counties.
Capital expenditures for third quarter 2016 were $247 million, including $8 million for acquisitions. Non-acquisition capital expenditures for third quarter 2016 included $198 million in exploration and development drilling, $24 million in leasehold and seismic and $17 million in workovers and recompletions.
