Aug. 9 (UPI) -- Continental Resources, one of the larger U.S. shale players, said it would be cash neutral in the current market, but raised its forecast for annual production.
Continental is active in the Bakken shale oil basin, centered mostly in North Dakota, the No. 2 oil producer in the nation behind Texas. CEO Harold Hamm said the company took a disciplined approach during the second quarter, which saw oil prices hold in the mid- to upper-$40 range per barrel.
"The results have been exceptional, raising our production guidance for 2017 and lowering our guidance for operating costs," he said in a statement. "We now expect to exit 2017 with production up 24 percent to 31 percent over the fourth quarter of 2016, with a lower range of capital expenditures for the year targeting cash neutrality between $45 and $51 per barrel for West Texas Intermediate."
WTI is the U.S. benchmark for the price of oil. It was priced near $49.40 per barrel early Wednesday.
Crude oil prices dipped below $30 per barrel in early 2016 because of market was tilted heavily toward the supply side. Oil inventory levels and increased global demand has supported stronger oil prices, though too much recovery increases the pressure for supply-side strains as companies increase exploration and production activity.
Continental said its annual production would probably be close to 240,000 barrels of oil equivalent per day and just over half of that would be as oil. That's higher than its previous guidance of around 250,000 boe per day.
The production and spending guidance is in line with improvements in efficiency among shale oil and gas operators, who are learning to do more with less in the current market.
"As our historical performance and updated guidance show, Continental is one of the lowest cost operators in the industry," President Jack Stark said.
Elsewhere, the company said it was signing off on the sales agreement for non-core shale basins in Oklahoma to undisclosed buyers for $ 140.5 million and oil-loading facilities in the state for $7 million. Continental said the acreage held minimal proved reserves and the proceeds would be used to reduce its debt.