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Continental Resources is bringing back previously shut-in oil production, seeing flow rates in some fields double compared to the rates before the curtailment, the company’s executives said on the Q2 earnings call.
In the middle of June, Continental Resources – which had shut in 70 percent of its output – said it expects to partially begin resuming production but still expects to curtail approximately 50 percent of its operated oil production.
As oil prices stabilized at around $40 a barrel, the U.S. shale patch began restarting production after curtailing output in the second quarter in response to the very low oil prices.
“We're seeing just pretty impressive flush production coming out of these wells when we turned them back on. And that's what we've experienced previously. And that's why we were never concerned about what how these wells would perform even though there was a lot of chatter about it,” Jack Stark, President & Chief Operating Officer, said.
“We shut-in all of our Montana production out there. And we had a shut-in for about two months, and we turned it back on and the production was double of what it was before we shut it in,” he added.
“Bottom line is the oil is there, and these reservoirs are performing very nicely for us,” according to Continental Resources.
The company reported a net loss for the second quarter and said it expects its 2020 annual production guidance at between 155,000 barrels of oil per day (Bopd) to 165,000 Bopd. The revised production guidance is expected to generate around US$1.3 billion of annual cash flow from operations and US$200 million of annual free cash flow at $40 per barrel WTI Crude, Continental Resources said.
Still, Continental thinks that the current $40 oil price is not sustainable long term, chief executive officer William Berry said on the earnings call.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com