Oklahoma energy companies continue to benefit from the country’s ongoing shale oil and natural gas boom.
Backed by strong drilling activity and higher oil and natural gas prices, Oklahoma City’s most active energy producers on Wednesday all reported improved first-quarter earnings.
The unusually cold winter slowed some production early in the quarter, but drilling activity continues to expand throughout the state and region.
Continental Resources Inc.
Continental once again achieved record quarterly oil production, prolonging a streak that began in the second quarter of 2010.
CEO Harold Hamm said Continental got off to a solid start in 2014, despite some challenging weather in the first quarter. There were delays in getting several pad locations connected to gathering systems, Hamm said, but Continental still managed to increase its total production for the 16th straight quarter.
The company produced 13.7 million barrels of oil equivalent in the quarter, up 25 percent over the same period of last year.
Continental’s net income rose to $226 million, or $1.22 a share. It earned $133 million, or 72 cents a share, in the first quarter of 2013.
The company’s adjusted net income was $272 million, or $1.47 a share, narrowly missed analysts’ estimates of $1.54 a share.
North Dakota’s Bakken Shale continues to be leading source of Continental’s oil production, but the company’s SCOOP play in western Oklahoma is growing.
Continental’s production in the South Central Oklahoma Oil Province was up 106 percent over the first quarter of last year to an average of almost 30,000 barrels a day.
Devon Energy Corp.
Backed by nearly $6 billion in asset purchases in the first quarter, Devon reported adjusted earnings of $547 million, or $1.34 a share, up 103 percent from the year-ago quarter and beating analyst expectations of $1.27 a share.
“The first quarter was another excellent one for Devon,” CEO John Richels said. “Our disciplined focus on high-margin oil development opportunities led to another quarter of outstanding growth in oil production that drove significant operating margin improvements.”
Devon on Feb. 28 closed on its purchase of assets in south Texas’ Eagle Ford, meaning the company had the benefit of the oil-rich production for only about one-third of the quarter.
“While we’ve only owned this position for a short time, the reservoir performance that we’ve seen to date has been outstanding, fully supporting our production growth targets and double-digit accretion in cash flow per net adjusted share,” Richels said.
Devon also outlined its growing production in New Mexico’s Delaware Basin, which it expects to ramp up through 2015. The company has identified more than 5,000 potential well sites, or more than 25 years of drilling activity in the area, which is on the western edge of the Permian Basin.