Continental Resources unveils Oklahoma oil field
Continental Resources on Tuesday announced a new oil play in southern Oklahoma. Known as the SCOOP, the oil-rich shale rock is the source of some of the state's oldest oil fields, including those tapped by the Phillips, Noble, Hefner and Skelly families, Continental said.
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Oct 10Continental Resources on Tuesday announced a new oil play...
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“I think the SCOOP will be interesting,” said Gail Nicholson, an analyst with KLR Group in Tampa, Fla. “I don't think the market has included that potential in the stock price. People think of Continental as the Bakken. Coming out and explaining the oil potential of the SCOOP will cause people to start to think about what's there. They have a good acreage position there. They're ahead of the game.”
While Continental executives touted the new field as an area of future potential, the Bakken will continue to be the company's primary focus, Stark said.
“We call the Bakken the king of the tight oil fields,” Stark said. “It is so large and just like other good fields, it keeps getting bigger. We think the Bakken should be used as a template or standard for oil field development.”
Continental is the largest producer, driller and leaseholder in the Bakken. The company produced 22.2 million barrels of oil over the past year, has 576 net wells in the region and has identified at least 4,000 potential wells.
The increased position in both the Bakken and in southern Oklahoma is expected to help the company continue to grow, CEO Harold Hamm said.
Hamm set a new goal of again tripling its production to 108 million barrels of oil equivalent and proved reserves to more than 1.5 billion barrels of oil equivalent by the end of 2017.
Analyst Andrew Coleman said he was pleased to hear that Continental will fund its increased drilling budget without taking on large amounts of debt.
“Continental is one of my favorite stocks,” said Coleman, an analyst with Raymond James in Houston. “The pushback I get from investors is that they are spending a lot of money. But anytime you can get the growth out of the market without stretching the balance sheet, it's the right approach.”