Leading Bakken oil producer, Continental Resources Inc. (CLR) released its proved reserves and production for 2013. Also presented were the company’s key cost metrics and capital expenditures for the fourth quarter.
Continental reported proved reserves of 1.08 billion barrels of oil equivalent (Boe) at Dec 31, 2013, up 38% or 299 million barrels of oil equivalent (MMBoe) from year-end 2012. The proved reserves were 87% company operated, 37% proved developed producing and 68% crude oil. Since year-end 2008, Continental has grown its proved reserves at a compound annual growth rate of 47% per year.
The main growth drivers of 2013 proved reserves was production increase in the Bakken play of North Dakota and Montana as well as accelerated production in the South Central Oklahoma Oil Province.
The company’s fourth quarter production totaled 13.3 MMBoe, up 35% from fourth quarter 2012. Average daily production was 144,250 Boe, up 2% on a sequential basis.
In 2013, estimated total production was 49.6 MMBoe, up 39% from 2012. Of the total production, crude oil accounted for 71% or 35.0 MMBoe. Estimated natural gas production is 87.7 billion cubic feet.
In 2013, capital expenditures excluding acquisitions came in below the budget of $3.6 billion, of which $3.1 billion was spent toward drilling and completion operations. Acquisition capital expenditures amounted to $270 million.
The company’s fourth quarter production expense as well as depreciation, depletion and amortization (DD&A) were adversely impacted by lower volumes resulting from winter weather delays. On a sequential basis, production expense and DD&A are expected to be about $0.90 higher than $5.17 per Boe and about $1.50 higher than $18.87 per Boe, respectively. However, both production expense and DD&A for full-year 2013 is expected within the annual guidance.
Continental carries a Zacks Rank #3 (Hold). However, there are other Zacks Ranked #1 (Strong Buy) stocks in the oil and gas industry like Helmerich & Payne, Inc. (HP), Swift Energy Co. (SFY) and Cabot Oil & Gas Corporation (COG) that appear attractive for the short term.
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