July 25 (UPI) -- U.S. shale player Continental Resources reported weather-related issues for production in the second quarter, but hinted at strong second-half gains.
Continental is one of the more active producers in the Bakken shale formation in North Dakota, operating about 10 percent of all active rigs in the state as of Wednesday. The company reported second quarter average production of 284,059 barrels of oil equivalent per day, just below guidance, but an increase of 25 percent from second quarter 2017. Of that total, 55 percent of production was oil.
Production would've been just above 289,000 boe per day if not for wet weather in the Bakken shale basin and voluntary restrictions to secure capacity on regional transit infrastructure.
Continental in April secured a transportation agreement for access to Project Wildcat, a takeaway project steered by Enable Midstream Partners for Oklahoma shale resources. All told, the project delivers approximately 400 million cubic feet of natural gas to the market in north Texas, where legacy natural gas assets are on the decline.
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Nevertheless, production during the first half of July was between 296,000 boe per day and 298,000 boe per day, with oil accounting for about 56 percent of the total.
By the fourth quarter, Continental expects oil will account for as much as 60 percent of its total production. Harold Hamm, the company's chairman and CEO, said he expects "significant" growth in production during the second half of the year, driving not only by Bakken, but by assets in Oklahoma and elsewhere.
"These assets will not only drive a new wave of oil production in the second half of 2018, but will also provide a catalyst for strong oil-weighted growth in 2019," he said in a statement.
North Dakota reported oil production in May, the last full month for which the state published data, reached a preliminary rate of 1.24 million barrels per day, an all-time high if verified.
Lynn Helms, a state director at the Department of Mineral Resources, said the prospects for Bakken gains were high. The price for West Texas Intermediate, the U.S. benchmark for the price of oil, would have to drop below $45 per barrel for more than 30 days before exploration and production starts to decline, he said.
WTI was priced at around $68 per barrel early Wednesday EDT. Helms added, however, that the rig counts, a loose barometer for exploration and production, could be limited by capital and labor concentrating in the Permian shale basin in Texas and the Anadarko play in Oklahoma.
Continental reported a production average of 287,410 boe per day during the first quarter. The company reports second quarter results Aug. 8.
