Continental Resources, Inc. operates as an independent crude oil and natural gas company.
The company engages in the exploration, development, management, and production of crude oil and natural gas and associated products in the North, South, and East regions of the United States. Additionally, the company pursues the acquisition and management of perpetually owned minerals located in its key operating areas.
During 2021, the company executed strategic acquisitions to expand its operations in...
Continental Resources, Inc. operates as an independent crude oil and natural gas company.
The company engages in the exploration, development, management, and production of crude oil and natural gas and associated products in the North, South, and East regions of the United States. Additionally, the company pursues the acquisition and management of perpetually owned minerals located in its key operating areas.
During 2021, the company executed strategic acquisitions to expand its operations into the Permian Basin of Texas and the Powder River Basin of Wyoming.
The company’s North region consists of properties north of Kansas and west of the Mississippi River; and includes North Dakota Bakken, Montana Bakken, Powder River Basin, and the Red River units. The company’s South region includes all properties south of Nebraska and west of the Mississippi River; and includes the South Central Oklahoma Oil Province (SCOOP) and Sooner Trend Anadarko Canadian Kingfisher (STACK) areas of Oklahoma and the Permian Basin of Texas. The company’s East region is primarily consisted of undeveloped leasehold acreage east of the Mississippi River with no significant drilling or production operations.
The company focuses its activities in large crude oil and natural gas plays that provide it the opportunity to acquire undeveloped acreage positions and apply its geologic and operational expertise to drill and develop properties.
The company has been successful in targeting large repeatable resource plays where three dimensional seismic, horizontal drilling, geosteering technologies, advanced completion technologies (e.g., fracture stimulation), pad/row development, and enhanced recovery technologies allow the company to develop and produce crude oil and natural gas reserves from unconventional formations.
As of December 31, 2021, the company’s proved reserves were 1,645 million barrels of crude oil equivalent (Boe) (MMBoe), with proved developed reserves representing 908 MMBoe, or 55%, of its total proved reserves. The company’s total production averaged 329,647 Boe per day for 2021.
The company held approximately 538,400 net undeveloped acres and 1.40 million net developed acres under lease concentrated in core areas of premier U.S. resource plays that provide optionality and access to crude oil, natural gas, and natural gas liquids as of December 31, 2021.
In 2021, the company acquired oil and gas properties and related assets in the Permian Basin of Texas from certain subsidiaries of Pioneer Natural Resources Company. The properties included approximately 92,000 net leasehold acres; approximately 50,000 net royalty acres in the same area normalized to a 1/8th royalty; production totaling approximately 42,000 Boe per day (~78% oil) based on two-stream reporting at the time of closing; and extensive water infrastructure.
As of December 31, 2021, there were 393 gross (153 net) operated and non-operated wells that have been spud and were in the process of drilling, completing or waiting on completion.
North Region
The company’s principal producing properties in the North region are located in the Bakken field of North Dakota and Montana, and its acquired properties in the Powder River Basin of Wyoming.
Bakken Field
The Bakken field of North Dakota and Montana is one of the largest crude oil resource plays in the United States. The company is a leading producer, leasehold owner and operator in the Bakken. As of December 31, 2021, the company controlled one of the largest leasehold positions in the Bakken with approximately 1.2 million gross (771,900 net) acres under lease.
The company’s total Bakken production averaged 175,585 Boe per day for the fourth quarter of 2021. In 2021, the company participated in the drilling and completion of 252 gross (102 net) wells in the Bakken. The company’s 2021 activities in the Bakken focused on ongoing multi-zone unit development in core areas of the play.
The company’s total proved Bakken field reserves were 708 MMBoe as of December 31, 2021. Its inventory of proved undeveloped drilling locations in the Bakken totaled 1,254 gross (701 net) wells as of December 31, 2021.
In 2022, the company plans to average approximately six operated rigs and two well completion crews in the Bakken and expects to have first production on 264 gross (116 net) operated and non-operated wells during the year.
Powder River Basin
The company’s production in the Powder River Basin averaged 7,189 Boe per day for the fourth quarter of 2021. During 2021, the company participated in the drilling and completion of 10 gross (8 net) wells in the play. The company’s proved reserves in the play totaled 32 MMBoe as of December 31, 2021 and its inventory of proved undeveloped drilling locations totaled 55 gross (34 net) wells.
In 2022, the company plans to average approximately two operated rigs and one well completion crew in the play and expect to have first production on 34 gross (20 net) operated and non-operated wells during the year.
South Region
The company’s principal producing properties in the South region are located in the SCOOP and STACK areas of Oklahoma, and its acquired properties in the Permian Basin of Texas.
Oklahoma
The company is a leading producer, leasehold owner and operator in Oklahoma. As of December 31, 2021, the company controlled one of the largest leasehold positions in Oklahoma with approximately 801,700 gross (448,300 net) acres under lease.
The company participated in the drilling and completion of 161 gross (63 net) wells in Oklahoma during 2021. Its proved reserves in Oklahoma as of December 31, 2021 totaled 679 MMBoe. The company’s inventory of proved undeveloped drilling locations in Oklahoma totaled 313 gross (170 net) wells as of December 31, 2021.
In 2022, the company plans to average approximately seven operated rigs and two well completion crews in Oklahoma and expects to have first production on 117 gross (41 net) operated and non-operated wells during the year.
Permian Basin
Proved reserves associated with the company’s Permian Basin properties acquired in late 2021 totaled 203 MMBoe. Production from the company’s Permian properties averaged approximately 42,000 Boe per day based on two-stream reporting during its short duration of ownership from December 21, 2021 to December 31, 2021.
In 2022, the company plans to average approximately four operated rigs and one well completion crew in the play and expects to have first production on 49 gross (46 net) operated and non-operated wells during the year.
Marketing
The company sells most of its operated crude oil production to crude oil refining companies or midstream marketing companies at major market centers. In the Bakken, Powder River, Permian, SCOOP, and STACK areas, the company has significant volumes of production directly connected to pipeline gathering systems, with the remaining production primarily transported by truck to a point on a pipeline system for further delivery. The company does not transport any of its oil production prior to sale by rail, but several purchasers of its Bakken production are connected to rail delivery systems and may choose those methods to transport the oil they have purchased from the company. The company sells some operated crude oil production at the lease. Its share of crude oil production from non-operated properties is marketed at the discretion of the operators.
The company sells most of its operated natural gas production to midstream customers at its lease locations based on market prices in the field where the sales occur, with the remaining production sold at centrally gathered locations or natural gas processing plants. These contracts include multi-year term agreements, many with acreage dedications. Under certain arrangements, the company has the right to take a volume of processed residue gas and/or natural gas liquids (NGLs) in-kind at the tailgate of the midstream customer's processing plant in lieu of a monetary settlement for the sale of its operated natural gas production.
The company continues to develop relationships and has the potential to enter into additional contracts with end-use customers, including utilities, industrial users, and liquefied natural gas exporters, for sale of products the company elects to take in-kind in lieu of monetary settlement for its leasehold sales. The company’s share of natural gas production from non-operated properties is generally marketed at the discretion of the operators.
Business Strategies
The company’s business strategies continue to be focused on generating significant shareholder value by finding and developing crude oil and natural gas reserves. For 2022, the company’s primary business strategies will include developing its acquired properties in the Permian Basin and Powder River Basin by applying its geologic and operational expertise; and driving continued improvement in its health, safety, and environmental performance and governance programs.
Regulation
The company’s physical sales of crude oil and any derivative instruments relating to crude oil are subject to anti-market manipulation laws and related regulations enforced by the Federal Trade Commission (FTC) and the Commodity Futures Trading Commission (CFTC).
The company is also required to observe the aforementioned anti-market manipulation laws and related regulations enforced by the Federal Energy Regulatory Commission (FERC) and CFTC in connection with physical sales of natural gas and any derivative instruments relating to natural gas. Additionally, the FERC regulates interstate natural gas transportation rates and service conditions under the Natural Gas Act and the Natural Gas Policy Act of 1978, which affects the marketing of natural gas the company produces, as well as revenues it receives for the sale of its natural gas.
The company is also subject to the requirements of the federal Occupational Safety and Health Act and comparable state laws that regulate the protection of the health and safety of workers.
History
Continental Resources, Inc. was founded in 1967.
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