OKLAHOMA CITY, Sept. 9 (UPI) -- Even with a cut in capital spending, Continental Resources said it expects production to be on the high end of its estimates despite an oversupplied market.
Continental, one of the premier shale oil and natural gas companies working in the United States, said it expects production to be up to 23 percent more than last year. By the end of 2015, the company said production should be around 215,000 barrels of oil equivalent per day.
"Annual production growth is expected to be toward the top end of our guidance range," Chief Financial Officer John Hart said in a statement. "Production expense per boe and general and administrative expense per Boe are also trending positively toward the low end of guidance."
Weak global economic momentum, highlighted recently by the slowdown in the Chinese company, is leaving the crude oil market weighed heavily on the supply side. That, in turn, has left crude oil to trade at 50 percent below June 2014 levels.
Continental, which has headquarters in Oklahoma, said it should be cash-flow neutral if West Texas Intermediate, the U.S. benchmark for crude oil prices, remains around $50 for the rest of the year. WTI before the start of trading Wednesday in New York was priced at $45.98.
With WTI at around $40, Continental said spending would be about $150 million over cash flow.
Harold Hamm, chairman and chief executive officer at Continental Resources, testified on Capitol Hill in July that what industry supporters describe as the era of U.S. oil abundance was under threat in part from the market influence of the Organization of Petroleum Exporting Countries.
Hamm testified the U.S. market has lost "$125 billion in revenue" and half a million industry workers are out of a job "thanks to OPEC's predatory pricing."
OPEC has maintained a steady level of production despite the depressed oil economy, arguing it needs to protect its market share. In announcing plans to cut spending by up to $350 million, Hamm said adjustments were needed in the weak market.
"We are reducing capital expenditures to protect our balance sheet and to preserve the value of our world-class assets until commodity prices improve," he said.