Continental Resources plans to spend 64% of its $1.75 billion capital expenditure budget, or $1.12 billion, for 2012 on continued development and production increases in the Bakken and Three Forks formations in North Dakota and Montana, a spokeswoman for the US E&P company said Monday.
The majority of the capital expenditure budget will focus on drilling, the spokeswoman, Kristin Miskovsky, said in an email.
In the upcoming year, Continental plans to participate in a total of 488 wells, operating 176 of them. The company currently had 24 rigs in the Bakken and Three Forks formations. The Three Forks formation lays beneath Bakken.
The Enid, Oklahoma-based company reported a 27% increase in Bakken production to 34,505 boe/d in the third quarter compared to the second quarter. The production rate for the third quarter was 73% higher than Bakken production in the third quarter of 2010, which was 19.953 boe/d, the company said in its earnings statement.
"Superior rates of return in the Bakken are the key to our 2012 drilling program and production growth," Harold Hamm, Continental's Chairman and CEO, said in the company's third quarter earnings report.
"Our rate of return in the Bakken currently ranges from 40-to-50 percent, based on an average well cost of $8 million and our current estimated ultimate recovery of 603,000 barrels of oil equivalent per well," he said. "The Bakken remains the focus of our growth plan."
Currently, the company has 45 operated wells, 20 of which are scheduled to be fracture-stimulated and 25 of which have been fracked and are being prepared for production, according to the Q3 report.
