Thanks to a strong early performance in 2022 by its gas wells in the Anadarko Basin, Continental Resources raised its natural gas production guidance.
Doug Lawler, Continental’s Chief Operating Officer and Executive Vice President told investors at this month’s conference call following the first quarter 2022 financial earnings report that the guidance was increased to 1.1 billion to 1.2 billion cubic feet of natural gas a day.
He attributed the response to the early production from the company’s gas wells operating in the SCOOP and STACK plays of the basin.
“These additional volumes are benefiting our free cash flow and return of capital employees,” said Lawler.
The natural gas guidance increase followed a similar move by Continental for its annual oil production which was increased to 200,000 to 210,000 barrels of oil a day.
Continental’s oil and gas production is on the increase as the Oklahoma City company acquired more than 600,000 net acres in the Bakken, Anadarko, Powder River and Permian Basins in the past 18 months. Lawler said it represented a 50% increase in the company’s total net acres.
“As we message last quarter, our expansion into the Permian and Powder River basin has been exceptional. Our teams have done a great job on all fronts, assimilating the existing assets, as well as standing up multiple drilling rigs in both basins to develop and explore these two high quality assets,” added Lawler.
Investors and analysts were told that the company’s most recent acquisition in the Delaware Basin resulted in a recently completed 10-well unit that had flowing accumulative 15,300 barrels of oil equivalent a day.
“We currently have four rigs operating in the Delaware, and we are planning for one additional rig in the second half of 2022. Our focus will be full unit development of the Bone Springs and Wolfcamp reservoirs across our position in the Delaware basin,” continued Lawler.
In the Powder River Basin, the company had 19 new wells producing an average IP 30 of 1,151 BOE a day.
“We plan to complete wells on four other reservoirs by the end of the year. We expect to drill more than 100 wells in the next two years in the Powder with roughly 90% of these wells targeting the Niobrara and Frontier/Turner formations,” said Lawler.
But like every other energy company, Continental is also challenged by inflation. As a result, the company leadership decided to allocate another $100 to $125 million toward the issue. Lawler explained inflationary pressure is up 20% on the company compared to 2021.
“Overall, we believe our strong results and forward looking projections highlight the strength of our operations, our teams and our assets, and how this performance translates to significant and sustainable corporate returns and cash flow generation,” he said.
