Continental Resources Inc.’s fourth-quarter profits slipped nearly 40 percent even as production jumped 35 percent, the Oklahoma City-based oil company said Wednesday.
Continental posted a net income of nearly $133 million, or 72 cents a share, down from nearly $221 million, or $1.19 a share, in the fourth quarter of 2012. Excluding one-time items, the company’s adjusted net income was $228 million, or $1.23 a share, up 19 percent from almost $192 million, or $1.04 per share, in the year-ago quarter.
Among the excluded items is a $102 million loss on price hedges and other derivatives.
Production surged 35 percent to more than 144,000 barrels of oil equivalent per day, up from almost 107,000 barrels per day in the year-ago period. Oil represented 70 percent of Continental’s production in the most recent quarter.
Continental’s aggressive drilling program boosted the company’s proved reserves to 1.08 billion barrels of oil equivalent at the end of 2013, up 38 percent on the year.
“Our teams performed at an exceptional level in 2013, achieving our key growth targets for the initial year in our five-year plan to triple production and proved reserves,” CEO Harold Hamm said in a statement.
Production in North Dakota’s oil-rich Bakken formation jumped 38 percent year-over-year, but the harsh winter weather kept levels flat from the third quarter to the fourth quarter, Continental said Wednesday.
Continental said it completed a key test to see how many wells it can effectively drill in a small area in the Bakken. The company drilled 14 wells in four rock layers at its Hawkinson unit in North Dakota. After four months of production, 12 of the 14 wells “are performing very well” with average production about 50 percent above the company’s estimated ultimate recovery model for a typical well in the area, Continental said.
“The Hawkinson project has been a huge success and the culmination of efforts across the entire company — geology, micro-seismic, drilling, completions, surface logistics and marketing, to name a few,” President Rick Bott said in a statement. “This is a landmark event for our company and the industry ... This first test validates our vision for full-field development of the Bakken and the vast resource potential across our acreage position."
Continental also reported strong results from its efforts in its South Central Oklahoma Oil Province, or SCOOP. The company’s production jumped to 23,750 barrels of oil per day, up 233 percent from the year-ago quarter.