OKLAHOMA CITY, Jan. 27 (UPI) -- U.S. shale player Continental Resources said weakness in the energy sector will manifest itself in a slow decline in overall production through 2016.
Continental said in a statement laying out its plans for the year that first quarter production will average around 215,000 barrels of oil equivalent per day and drop around 13 percent to 185,000 boe in the fourth quarter.
Lower crude oil prices means less capital available for energy companies to invest in exploration and production, a trend reflected in the number of drilling rigs deployed across the country. Continental recently pulled four rigs from the Bakken shale oil reserve area in North Dakota, one of the country's premier basins.
For the year, Continental said it had a budget of around $920 million, a 66 percent reduction from last year. In terms of the relationship to crude oil prices, the company said its budget would be cash-flow neutral if West Texas Intermediate, the U.S. benchmark for crude oil prices, is $37 per barrel on average for the year. WTI was trading around $30 per barrel in early Wednesday trading, down about $6 per barrel, or 16 percent, for the year.
Chief Financial Officer John Hart said more cost reductions could materialize as the company focuses on core operating areas.
"In terms of our budget, each $5 move in WTI prices impacts our full-year cash flow by $150 million to $200 million," he said in an emailed statement.
More than half of the company's budget will remain focused on combined shale interests in North Dakota and, to a lesser extent, Oklahoma.
Shares in Continental Resources (NYSE:CLR) were up 10.5 percent, or $1.79, in early trading.