America’s Oil Boom Is Fueling Growth at Continental Resources Inc.

A 39% increase in production caps a great year for Continental Resources Inc.

Feb 11, 2014 at 1:06PM

Images

Photo credit: Ole Jorgen Bratland / Statoil ASA

The oil keeps flowing for Continental Resources (NYSE:CLR). The Bakken Shale-focused driller grew its production by 39% last year. On top of that the company grew its proved reserves by 38% ensuring that its oil will continue to flow for years to come. Let's take a closer look at the company's success in 2013 as well as at its future potential.

Bakken Shale-fueled production growth
Continental Resources was able to grow its production to 49.6 million barrels of oil equivalent, or BOE last year. That was 39% more oil and gas than the company produced in 2012. Overall, 71% of the company's production was oil as the oil rich Bakken Shale of North Dakota continues to fuel a bulk of Continental Resources production.

Continental's production could have been even higher if the company didn't experience significant weather delays in the fourth quarter. The company noted that its production for the quarter averaged 144,250 BOE/d, but it hit a new production milestone of 150,000 BOE/d in November before bad weather hit. It was just recently able to regain production above 150,000 BOE/d.

Looking ahead to 2014, Continental Resources expects to grow its production by 26%-32%. Most of that growth will again be fueled by the Bakken Shale, however, the company is beginning to focus more of its attention on growing its production out of Oklahoma.

Reserves are growing nicely too
Continental Resources is growing its proved reserves nearly as fast as it's growing its production as evidence by its by 38% growth to 1.08 billion BOE. About three quarters of the company's proved reserves are in the Bakken Shale where it continues to add new reserves.

The Bakken Shale has been good to oil companies of all sizes. Norway's Statoil ASA (NYSE:STO), for example, noted in its latest earnings release that the Bakken Shale was one of the areas where it was able to add to its reserves last year. Statoil's spending to ramp-up its production in the Bakken and other U.S. shale plays led to increased reserves being recorded. Meanwhile, the reserves of smaller Bakken focused drillers like Oasis Petroleum (NYSE:OAS) are showing tremendous growth. The company grew its proved reserves by 59% to 227.9 million BOE. The combination of upward revisions to previous estimates as well as new discoveries enabled Oasis Petroleum to organically add four times as much oil as it produced last year.

All that being said, the area where Continental Resources saw the biggest boost in reserves last year was in the SCOOP play in Oklahoma. The company grew its SCOOP reserves from 63 million BOE to 215 million BOE, which was a 214% jump. Investors should expect to see continued rapid growth in the company's SCOOP reserves as it's spending a quarter of its 2014 capital budget to grow its rig count by 80% as it further develops that play.

Investor takeaway
Led by the Bakken Shale, Continental Resources sees no end in sight to its ability to grow both its oil production and reserves. In fact, the company remains on pace to triple both metrics from its 2012 base by the year 2017. That growth makes it an exciting way to invest in the American oil boom.

Three more stocks that are profiting from America's oil boom

Record oil and natural gas production is revolutionizing the United States' energy position. It can also fuel gains into your portfolio. For a list of three of our favorite oil boom stocks, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

 

Matt DiLallo has no position in any stocks mentioned. The Motley Fool recommends Statoil (ADR). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers