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Continental Resources, Inc. (NYSE:CLR)
Q2 2018 Earnings Conference Call
August 8, 2018, 12:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the Q2 2018 Continental Resources, Incorporated earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press * then 0 on your touchstone telephone. As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Mr. Rory Sabino, Vice President of Investor Relations. Sir, you may begin.

Rory Sabino -- Vice President of Investor Relations 

Good morning. Thank you for joining us. I would like to welcome you to today's earnings call. We'll start today's call with remarks from Harold Hamm, Chairman and Chief Executive Officer, Jack Stark, President, and John Hart, Chief Financial Officer.

Also on the call and available for Q&A later will be Jeff Hume, Vice Chairman of Strategic Growth Initiatives, Tony Barrett, Vice President, Exploration, Pat Bent, Senior Vice President, Drilling, Gary Gould, Senior Vice President, Production and Resource Development, Steve Owen, Senior Vice President, Land, Ramiro Rangel, Senior Vice President, Marketing and Human Resources, and Adam Longson, Director of Commodity Research.

Today's call will contain forward-looking statements that address projections, assumptions, and guidance. Actual results may differ materially from those contained in forward-looking statements. Please refer to the company's SEC filings for additional information concerning these statements and risks.

In addition, Continental does not undertake any obligation to update forward-looking statements made in this call. Also this morning, we will refer to initial production levels to new wells, which unless otherwise stated, are maximum 24-hour initial test rates. We will also reference rates of return, which unless otherwise stated, are based on $70.00 per barrel WTI and $3.00 per NCF natural gas.

Finally, on the call, we will refer to certain non-GAAP financial measures. For a reconciliation of these majors to generally accepted accounting principles, please refer to the updated investor presentation that has been posted on the company's website at www.clr.com.

With that, I will turn the call over to Mr. Hamm. Harold?

Harold G. Hamm -- Chairman and Chief Executive Officer

Thanks, Rory. Good morning, everyone. Welcome to our second quarter 2018 earnings call. Over the past three and a half years, our industry has labored to overcome the ill-advised over-supply of oil. Today, however, the macro looks good for the supply and demand oil cycle as annual demand growth nears 1.8 million barrels per day in the strong global economy.

Our highly tuned and efficient company is well-positioned to benefit over the next several years as a result of this rebalanced market condition that suits our particular inventory of American oil production. The mid-continent SCOOP and STACK in the Williston Basin Bakken are not hampered by restricted oil infrastructure and have additional opportunities for its high-grade and quality crude oil to access the water-borne export market as additional large-capacity pipelines are reversed to deliver oil to the Gulf for export.

I'm excited to discuss the announcement made earlier this week on our minerals transaction, which consisted of a divestiture and new relationship that is expected to enhance shareholder value for many years to come. Continental created a new business unit and subsidiary for the sole purpose of acquiring oil and gas mineral interest in our future drilling program to increase our net revenue interest.

We are pleased to announce this newly formed relationship with a form that has a long, distinguished track record of success in the precious metals and mineral ownership business, Franco-Nevada. Both companies will benefit from an expanded mineral acquisition format over the next several years, targeting our near-term drilling in our oil and gas plays as defined by our technical teams.

As we described in our earnings release, Continental will apply the initial proceeds of approximately $220 million to partially fund CapEx spend on minerals, which effectively reduces the $400 million additional CapEx spend in 2018 to $180 million. Congratulations to the teams at both companies for this new and exciting relationship.

We previously disclosed second quarter production and the factors that impacted it. Our second quarter production fell just slightly below 285,000 to 290,000 BOE per day guidance due to abnormally wet weather in the Bakken, along with our decision to temporarily curtail gas production in Oklahoma due to the upcoming completion of the Project Wildcat pipeline, which is delivering to a premium market in the Dallas-Fort Worth area. We estimate we would have been approximately 5,000 BOE per day higher if not for these events.

Second quarter production was a transitory event as production quickly recovered in July. Our net income for the second quarter is $242.5 million. As in the first quarter, we are delivering on our guidance of positive cashflow growth in which we are well on our way with our debt goal, as evidenced by our recent call of $400 million of bonds. Incidentally, it appears we're the only un-hedged oil producer in our peer group able to fully participate in these higher oil prices we have today.

As we have stated before, we are returns-driven at Continental and our oil-focused drilling and development as well as our entrepreneurial innovation propel our industry-leading performance. Today, we'll focus on Continental's oil development, which represents 95% of our activity and go-forward budget for 2018 as a follow-up on the shift and drilling resources we talked about briefly last quarter.

Leading in the rates of return category are the North Dakota Bakken and Oklahoma Springer plays with 150%+ rates of return. Both these plays will contribute to a wave of new oil production, beginning in the third quarter and growing both second half 2018 and full-year 2019 production numbers in terms of both production and oil percentage.

Let's review the Bakken first. Our Northern team at Continental has positioned us very well in this higher-priced environment by improving our type curve once again. Our newly improved type curve announced this quarter is based on a higher completion stage count and more entry points along the lateral. It further improves the type curve announced earlier in the year.

The new higher 1,200 MBOE EUR type curve generates 175% rate of return at $70.00 oil based on $8.4 million CapEx per well. Continental is the largest producer and lease holder in the Bakken, which positions us for additional oil production growth for many years to come.

Secondly, the 85% oil Springer row development of Project SpringBoard is proceeding nicely with drilling under way and both drilling and completion operations to be systematically executed in the very near future. Production on the first row is due to begin in September, with up to 18 wells producing by year-end, thereby adding to the 2018 exit rate as well as to the new oil production way for 2019.

Next, our STACK activity has been focused on the over-pressured oil window, which continues to produce great wells such as Swaim 3 at 3,476 BOEPD, which includes 2,496 BOPD and the Madeline 2 at 3,540 BOEPD, which includes 2,548 BOPD, all high rate of return oil producers.

In addition, we just set a record for the fastest STACK well drill to date. The Quintle 4 well TD'd in just 19.3 days. Then there's the oil-prone Woodford formation SCOOP SpringBoard. You will hear much more about this in the coming quarters, but we have begun orderly and systematic development with four rigs at this time in the Williams and Paul unit. This is another high rate of return oil project area that Jack will talk more about today.

At Continental, we have always been all about oil and we certainly are today. As a leading low-cost producer with outstanding drilling inventories and the best oil plays in America, our focus on capital efficient growth, free cashflow, and corporate returns will provide the combination of long-term growth and value creation for the company.

During the period of over-supply and rebalancing, Continental remained very disciplined and diligent in our mission to reduce costs. We [inaudible] an opportunity to take advantage of what we believe are favorable market conditions for Continental and its shareholders. We believe we would be remiss if we did not move when presented with this unique opportunity, considering the great potential Continental has in oil, not only in the Bakken, but also in the SCOOP.

So, we have elected to accelerate the net asset value of our oil portfolio while other basins remained constrained by lack of oil and gas infrastructure. The drilling and completion portion of this added investment will be focused on accelerated development of the oil-rated assets and increasing recovery from a red force.

Efficiencies also represent a big part of investment as we expect to complete 16 additional net wells during the year. The added DNC investment boosts are annual production guidance to an average of 290,000 to 300,000 BOEPD and increase our projected exit rate to 315,000 to 325,000 BOEPD. Again, we're using a very disciplined and guarded approach to additional growth and value creation.

Jack will discuss the proportional distribution of the increase. Jack?

Jack Stark -- President

Thank you, Harold, and good morning, everyone. Appreciate you joining us on our call today. As Harold pointed out, we have increased our annual production and exit rate guidance for 2018 and there are three principal drivers for this uplift. First, we expect to complete up to 16 more net wells this year, due primarily to the reallocation of rigs to higher working interest wells with shorter cycle times in the oil windows of SCOOP and STACK.

Second, our Bakken wells are outperforming expectations as we move from 40-stage to 60-stage completions as our new standard. Third, we plan to exit 2018 with 26 rigs, up three rigs from the 23 rigs we have drilling today. Combined, these strategic moves are expected to uplift production in the second half of '18, particularly in the fourth quarter and raise our exit rate guidance 10,000 BOEPD above prior guidance. With 95% of our rigs focused on oil, we also project our crude oil production will approach 60% in December.

These moves will provide a significant boost to the company's performance in 2019. To fund this additional activity, we've increased our drilling and completion CapEx for 2018 by $200 million. This includes $125 million of new capital and $75 million of reallocated capital from our original 2018 non-DNC budget. Approximately one-third of this capital is allocated to the Bakken and two-thirds is allocated to SCOOP and STACK.

In the Bakken, the bulk of the capital will fund our shift to 60-stage completions. We also expect to complete up to two additional net wells and add one rig by year end. Moving from 40 to 60-stage completion has increased our Bakken type curve EUR another 9% to 1.2 million BOE per well. This shift is based on results from 70 wells that clearly show our 60-stage completions are outperforming our previous 40-stage completions.

Now, for perspective, I want to remind everyone that this is our second type curve uplift over the past 12 months. Cumulatively, we have uplifted our Bakken type curve EUR 22% and doubled the rate of return to 175% by optimizing our completion techniques. This translates to an additional $3.5 million of incremental first year cashflow per well with payouts in as little as seven months. This is a great example of how our teams continually work to maximize the value of our top tier assets for continental shareholders.

In SCOOP and STACK, the capital will fund a completion of up to 14 additional net wells, due to the improved operating efficiencies and the reallocation of rigs from our carried position in the SK JDA to non-carried, higher working interest wells in the oil and condensate windows. We also plan to add two rigs to Project SpringBoard by October to accelerate development there.

Now, let's focus on some of the second quarter results. In the Bakken, we continued to deliver record results from our optimized 60-stage completions over an expanding cross-section of our acreage. We completed 35 gross operated wells during the second quarter, flowing at an average initial rate of 2,280 BOEPD with 80% of the production being oil. Four of the 35 wells made Continental's top ten list of Bakken producers based on 30-day production rates. One well was a record Bakken producer for the company, flowing at an average 30-day rate of 3,100 BOEPD.

If you look at slide nine, you can see these wells and where they're located and you can see they're about 40 miles from each other. Once again, demonstrating the widespread success of Continental's optimized Bakken completions. Similar results are being experienced by other operators throughout the [inaudible] and in a recent report, IHS defined this expanding footprint of outstanding wells as the new fairway for the Bakken.

This step change in performance comes at a great time as the North Dakota Industrial Commission estimates up to 45,000 wells remain to be drilled in the Bakken field and Continental currently has over 4,000 operated wells in inventory. So, bottom line, the Bakken continues to stand out as the premiere oil play in the US.

Moving on to Oklahoma, I will begin with STACK, where we are starting to see results from the rigs we shifted into the oil and condensate windows. We completed five strong oil producers that flowed at initial rates ranging from 3,065 to 4,030 BOEPD with 47% to 75% of the production being crude oil. Details of the wells are shown on slide 16 of our deck. We continued to be very pleased with our results from STACK and plan to keep four rigs focused on unit development in the oil and condensate windows.

In SCOOP, our activities focused primarily on Project SpringBoard, which is a high-impact crude oil project that could add as much as 10% to the company's oil production over the next 12 months. SpringBoard was announced last quarter. So, as a reminder, this is a massive, multi-year stacked pay crude oil project with up to 400 million BOE of gross unrisked resource potential and 70% to 85% of this production is expected to be crude oil.

The project is about 70 square miles in size with up to 350 potential locations to be drilled. This includes around 100 Springer and up to 250 Woodford and Sycamore locations. Continental will operate the project with an impactful average working interest of 75%.

Because of the sheer size of SpringBoard, we expect to realize significant cost savings driven in large part by our row development strategies. Our teams have already saved around $1 million on the cost of drilling a Woodford and Sycamore well by eliminating the need for intermediate pipe. In the Springer, our teams are targeting up to $1 million of additional savings per well through technologies they are currently testing and efficiencies they expect to gain as the project develops.

Now, in addition to the cost savings, SpringBoard has significant marketing advantages due to its location and strategic planning by a marketing team. From a crude oil marketing standpoint, we expect to realize the best net backs in the company from SpringBoard as pipeline infrastructure is already in place providing access to premium markets.

If you look on slide 15, you will see that our midstream provider's oil pipeline goes right through SpringBoard with an oil terminal strategically located in the center of the project. This pipeline connects directly with a refiner only 50 miles away and provides optionality to go to Cushing via pipe approximately 100 miles away. As a result, the differential for SpringBoard oil is expected to run under $2.00 a barrel.

Pipe-wise, our natural gas has access to premium pricing through enabled Wildcat pipeline that became fully operational in July. Under agreement, Continental has 400 million cubic feet of firm transportation on Wildcat 2 to hold our hub. We also plan to install a company-owned water recycling and distribution system in the near future to provide efficient use of our water resources and manage costs.

On top of all this, SpringBoard is located in our own backyard, just 40 miles from our corporate headquarters. It doesn't get much better than that. The great news is we have similar projects on the horizon.

Now, the development of SpringBoard is divided into two phases, with phase one focusing on the Springer reservoir and phase two focusing on the Woodford and Sycamore reservoirs. Both phases are now drilling with seven rigs focused on the Springer and seven rigs focused on the Woodford-Sycamore. We expect to have six rigs drilling in Woodford and Sycamore by October.

If you look at slide 13 on our deck, I will explain what development looks like from a purely logistical and timing standpoint. Phase one includes 29 Springer units with three to four additional wells planned for each unit. The units have been divided into four rows with plans to develop one and possibly two rows at a time. Phase one is on schedule with 7 of the 18 Springer wells in row one drilled and waiting on completion. First production from phase one should begin in September and we expect to have up to 18 Springer wells online by year end, including around three in the third quarter and up to 15 in the fourth quarter.

Phase two includes 32 Woodford and Sycamore units that are offset one mile from our Springer units to allow for simultaneous development. We currently plan to drill up to five additional Woodford wells and three Sycamore wells in each unit. Production from phase two should begin during the first quarter of 2019.

Now, as I conclude my comments, I want to emphasize that our uplift of production in CapEx guidance are completely driven by the outperformance both by our teams and our assets and significant operator efficiencies lie ahead. As a result, we expect to remain one of the lowest cost oil producers among our peers. Bottom line, we are just starting to realize the true value of our assets as we begin to harvest the deep inventory we've assembled in three of the top plays in the US.

With that, I'll turn it over to John.

John Hart --Senior Vice President, Chief Financial Officer, and Treasurer

Thank you, Jack. Good morning, everyone. Our continued focus is predicated on a disciplined approach to production growth, driving strong free cashflow generation and enabling continued debt reduction. First of all, I'm happy to report that during June, we achieved our near-term debt target of dropping below $6 billion in net debt. At the end of June, we were slightly above that level due to working capital timing and mineral acquisitions.

On July 12th, we announced the partial redemption of our 2022 bonds. Continental will redeem $400 million or 20% of the $2 billion in aggregate principal amount currently outstanding of our 5% senior notes. The redemption is scheduled to take place on August 16th, 2018 and will be funded through a combination of cash on hand and availability under the revolver, which is currently undrawn. Any such revolver usage is expected to be repaid over the course of the next few months from available free cashflow.

Overall, we are making good progress toward our ultimate debt goal of $5 billion or lower. As such, we anticipate additional bond calls in the not-too-distant future.

You may recall that our original 2018 guidance was for us to generate $800 million to $900 million in free cashflow at $60.00 WTI during the year. On the last call, we indicated that with prices continuing to strengthen and with our oil being unhedged, we were on track to approach approximately $1 billion in free cashflow for the year. Our estimates remain strong, allowing for us to invest in our minerals relationship and accelerate our focus on oil projects.

Let's take a moment to update you on cashflow in light of these investments. Our new CapEx budget includes $275 million for acquired minerals that we have either already closed on or anticipate closing on before year end. As we announced on Monday the closing of the new relationship with Franco-Nevada, we expect to receive approximately $220 million as Franco acquires an interest in a newly formed subsidiary that will focus on mineral acquisitions. Closing is anticipated in the fourth quarter.

Upon closing, the proceeds of Continental's cumulative divestitures since 2016 will exceed $1 billion in proceeds with very nominal associated production. Our divestiture program has focused on realizing appropriate value, not rushing to divest. You may recall that we previously indicated we were working on a novel approach to enhance shareholder value and reduce debt.

We view our strategic relationship with Franco-Nevada as just such a venture, which leverage Continental's proprietary knowledge and expertise to create value while minimizing our capital required to grow this venture and still providing for debt reduction. This relationship is the first of its combined, combining a proven, inventory-rich operator with a leading royalty corporation to actively acquire and develop minerals.

As noted in each company's expected releases, we are in the process of building a significant mineral position ahead of future drilling. Our focus is on the undeveloped acreage in SCOOP and STACK. As we develop these areas, we will capture incremental value through mineral ownership and producing units.

While the revenue generated by minerals today is small, we expect to see accelerated growth as early as 2019 as continental continues development in areas where we have acquired minerals. As mineral revenues grow, we anticipate this venture to generate solid cashflow relatively quickly.

As an example of the prospective value of our minerals, in one area, Project SpringBoard, our new minerals venture owns an average of 10% of the minerals under the 35 1,280-acre units, representing approximately 4,300 acres. Across the broader minerals position, we expect the majority to have associated production over the next two years as we proceed with development.

As Continental is initially acquiring the minerals, the acquisition will be accounted for as a capital expenditure by Continental with a subsequent recoupment from Franco-Nevada of their share of the acquisition costs. Thus, our CapEx budget will be grossed up a bit, but I would encourage you to consider the net. We will participate in mineral revenues between 25% and 50% based upon achieving certain pre-determined targets. We anticipate full achieving these targets and realizing 50% of future revenues in foreseeable future.

Over the next three years, we anticipate an additional $300 million investment by Franco-Nevada with an associated $75 million investment by Continental, in essence, an 80-20 carry structure. I would echo Harold's earlier sentiments and congratulate each of the company's teams on establishing a new vehicle expected to build significant value for each company.

We anticipate that you likely will want additional details on our new venture, such as numbers per acre cost and other items of that nature. While we respect your need for details to model our new venture, please respect that we are in the midst of building our acreage position in a very competitive market and we will need to remain silent on some of the particulars today. A key takeaway observation is that we anticipate growing from a relatively small venture today to one with a significantly meaningful valuation in the next few years.

Transitioning to our broader guidance, our updated change in operating plans will specifically benefit the fourth quarter of 2018 with an even greater benefit occurring in 2019. Accordingly, we increased our full-year production guidance to a range of 290,000 to 300,000 per day. Our exit rate guidance was also increase from 315,000 to 325,000 BOEPD, indicating strong momentum entering 2019. Capital efficiency is holding strong and our cost estimates are in line with expectations. As such we are tracking toward the top end of our guidance range of 10% to 15% for return on capital employed.

We expect continued improvement in capital efficiency moving into 2019 with enhanced well productivity and efficiency. The net effect of these items inclusive of strong commodity prices and proceeds of the mineral divestiture is a net usage of $55 million for minerals and $125 million for drilling and completion or $180 million all in. This will leave us with expected free cashflow of $800 million to $900 million for 2018, currently tracking toward the higher end of this range, providing significant momentum for continued debt reduction.

This estimate includes the $275 million for CapEx for minerals as well as the $220 million associated recoupment to properly reflect projected cashflow. We continue to be on track to be in the 1.5 times annualized debt to EBITDA range by the end of the year. Further, we expect year-end net debt to be between $5.5 million and $5.7 billion with further debt reduction anticipated in 2019. Revenue for the second quarter was a strong $1.1 billion, 72% higher than the comparable prior year quarter.

Net income for the second quarter was $242 million or $0.65 per diluted share. Adjusted to remove items typically excluded by the investment community in published estimates, we posted an adjusted net income of $273 million or $0.73 per diluted share for the second quarter, driven by strong price realizations and cost efficiency. Non-acquisition capital expenditures were $714 million, up $118 million from the first quarter due to faster cycle time improvements along with other changes in our operating plans and mineral acquisitions.

Production was 26% higher than the second quarter of 2017 at just over 284,000 BOEPD. As previously discussed, we expect third quarter production to be between 290,000 and 295,000 per day. July production is above this range, but as we have fewer completions coming online near-term during the timing of pads, we expect production to naturally decline before beginning to grow again as we move through the balance of the year.

As more projects come online in the back-half of the year, production is expect to ramp up like it did it 2017. We expect strong oil growth in the next two quarters with the oil ratio approaching 57% in the third quarter and the fourth quarter to be comfortably within a range of 58% to 60%, reflecting a significant level of Bakken completions and initial results from project SpringBoard in the back-half of the year. Overall our selected second quarter cash costs were in line with guidance.

G&A excluding equity compensation was $1.41 per BOE and production expense was $3.49 for BOE. Production expense was impacted by June weather and workovers in North Dakota as well as gas curtailment in Oklahoma. Although year to date production expenses of 354,000 for BOE are currently outside of guidance, we expect that on a full-year basis, we will be within the guidance range previously provided of $3.00 to $3.50 per BOE.

Production tax was an average of 7.7% in the second quarter. All in, we are executing favorably against guidance. We still remain unhedged on the oil side, allowing for full participation in prices.

Our 2019 outlook continues to remain very strong, with current expectations for production to grow 15% to 20% year over year while generating significant free cashflow comparable to 2018 projections. The greatest benefit of the additional capital investment we announced yesterday will be seen in 2019 and beyond as we accelerate activity in our oil-focused assets, resulting in strong 2019 oil production. We anticipate updating you for 2019 guidance early next year.

With that, we're ready to begin the Q&A of our call and I'll turn the call back over to the operator. Thank you.

Questions and Answers:

Operator

Thank you. Ladies and gentlemen, if you have a question at this time, please press the *, then the number 1 key on your touchstone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the # key. Again, that's * then 1 to ask a question. To prevent any background noise, we ask that you please place your line on mute once your question has been stated.

Our first question comes from Drew Venker with Morgan Stanley. Your line is now open.

Drew Venker -- Morgan Stanley -- Analyst

Hi, good morning, everyone. I wanted to follow-up on your comments, John, on debt targets. You obviously made a lot of progress there. Can you speak to what you plan to do with your free cashflow after you achieve that $5 billion net debt target? We have you really getting there I think by the early part of next year.

John Hart --Senior Vice President, Chief Financial Officer, and Treasurer

That's a fantastic position to be in. As we've noted, we have the opportunity for continued net reduction. I think you'll see some of that in balance. We obviously have the opportunity to put a little more of it back into growth and to the assets and what we're doing. I think there will be some balance with that.

As we previously discussed on the last two or three calls, dividends are something we're actively considering. We want to see or achieve the $5 billion before any action in that nature, but we are dramatically on progress for that. So, it's a really good, strong position for the company to be in and I think we're pleased with the progress we're making today.

Drew Venker -- Morgan Stanley -- Analyst

Agreed. It's a great position to be in. Just to follow-up on the potential for the dividend, do you have a specific strategy for that? Is it to be above the S&P yield or something that really draws new investors into the stock or would it be something that's sustainable and you can continue to grow over time? Have you guys thought through that or have any thoughts to share?

Harold G. Hamm -- Chairman and Chief Executive Officer

We do have some thoughts and we are putting together a plan that will be sustainable and we can add to and grow as the company grows in the future. So, yes, we have a formula that we're putting together at this time and one that we want to continue with.

Drew Venker -- Morgan Stanley -- Analyst

Just one follow-up, I guess, as it relates to the operations -- the Bakken performance looks very strong and you guys are obviously adding rigs in Oklahoma as well. So, it indicates very high confidence in all the assets. Can you speak to your more recent results in the Bakken and what you expect out of SpringBoard influencing where you'll allocate capital in 2019?

Jack Stark -- President

As far as how we allocate capital in 2019, I think it will be very similar to this move we just recently made. You see moves throughout the year where we're focusing on oil. So, as you look forward, that's what you'll see. You'll see stronger oil production growth and gas production growth as we move forward. That explains why the oil percentage is increasing, as John spoke to earlier.

John Hart --Senior Vice President, Chief Financial Officer, and Treasurer

If you look to 2018, we've got 90% to 95% of our drilling and completion CapEx going into oil-focused projects, liquids rich and I think you'll see something similar in '19. We are very focused on growing oil production.

Jack Stark -- President

In relationship to the performance, yes, we're seeing an outperformance in all of our assets here. So, we're really pleased with the performance and obviously it's driving our guidance that we provided this quarter.

Drew Venker -- Morgan Stanley -- Analyst

Thank you.

Operator

Thank you. Our next question comes from Doug Leggate with Bank of America Merrill Lynch. Your line is now open.

Doug Leggate -- Bank of America Merrill Lynch -- Managing Director

Thanks. Good morning, everybody. Jack, the increase in the type curve in the Bakken, can you address a couple of issues relating to the dynamics of the production rates? It doesn't look like the IP rates are changing a ton compared to the last time you raised the type curve. I think last time you said you added DSPs. So, can you talk to are we seeing the increase of the curve at the back end of, let's say, post-90 days, if you like, or is it right across the timeline of the curve? If I may have a bolt-on there -- the inventory associated with this new type curve, what's the depths of the inventory you see that we can attribute a 1.2 type curve with it?

Jack Stark -- President

Thanks, Doug. This is Jack. I'll pass the first part of that question to Gary and then I'll pick up on the inventory.

Gary Gould -- Senior Vice President of Production and Resource Development

Okay. As far as the first part goes, this new type curve does increase more at the front end than at the back end. So, what we're seeing is continued incremental production rates at the very beginning of the type curve. You can see that from results that you've seen quarter over quarter when we talk about our record average IPs or our record 30-day rates and that's continued to prove out as we go to these 60-stage completions.

But what I would also tell you is that the overall rate of return for this new type curve is higher than the last type curve. So, incrementally, we were able to invest an additional $500,000.00 per well and still get a very high 175% rate of return for that incremental capital.

Doug Leggate -- Bank of America Merrill Lynch -- Managing Director

So, slide nine, obviously, is what you're referring to, right? We should take that as indicative for the inventory going forward, which I guess is Jack's part of the question?

Jack Stark -- President

Yeah. As far as inventory is concerned, I'll tell you, Doug, we're continuing to see uplift in performance. So, the average EOR for our inventory continues to climb. So, to try to just give you some color right now on what the inventory looks like, if we're going to stick with eight to ten rigs for, say, the next ten years and drill about half our inventory during that time, the average blended rate of return, say, of $65.00 is in that 80% to 90% range.

So, that just gives you an idea of the quality and depth of that inventory. So, we continue, as I said, to see an uplift and we continue to keep our eye on that because really, what used to be tier two has now turned into tier one. This is exactly what you get when you get a breakthrough with technology in a large resource like the Bakken.

Doug Leggate -- Bank of America Merrill Lynch -- Managing Director

Okay. That's helpful. My follow-up is maybe for John. John, you like to keep us on our toes, I guess, with this minerals joint venture. You're right, we'd love a lot more information. I wonder if you could dumb it down for me. Is the intention here to enhance the value of your existing assets or take royalty interests in anybody's assets, frankly? In which case, would you intend to have production kind or cash in terms of how you'd report this? I'll leave it there.

John Hart --Senior Vice President, Chief Financial Officer, and Treasurer

Our intention is to grow value. We have a very deep geologic understanding of the plays we're in. We're focused here on SCOOP and STACK. We've got a team that's got a lot of history and has a lot of views. We will focus mostly on acreage that is operated by us that enables us to understand the timing of drilling and other things that can go into the economics and what we view as the value to pay.

But there will be opportunities and there have been opportunities where we've taken acreage under other operators. We might have a smaller interest in that well. We might not have an interest in that well going forward, but we understand the geology and the productivity of those resources.

The overall concept with this is to take that knowledge and expertise and capture incremental value. We view this as an opportunity to grow a multi-billion-dollar valuation on a company. You look to roughly $600 million of investment over the next few years and then you think of the productivity of the wells that we're bringing on in SCOOP and STACK. There's a valuable concept there that we can move forward with in deploying our knowledge and our longer-term development plans.

Harold G. Hamm -- Chairman and Chief Executive Officer

To add to John's comments on SpringBoard, that represents just a portion of our minerals and out of 35 units, we will operate 32 units in SpringBoard, which is pretty impressive.

Doug Leggate -- Bank of America Merrill Lynch -- Managing Director

John, I'm not going to labor this. I want to let someone else jump on, but I just want to be clear to understand -- the royalty piece would go into the joint venture but I would assume there might be some working interest add on associated with any royalty acquisition. Is that a fair way of thinking about it, in which case, I assume, Continental would fund that on its own?

John Hart --Senior Vice President, Chief Financial Officer, and Treasurer

If there's working interest, we would fund that on our own. This venture will be targeting the minerals specifically. I guess there can be situations where an owner of the working lease. Interest, we take a lease and we acquire the minerals in a similar transaction, but we'll try and keep those as two separate transactions.

From an accounting standpoint, you asked about that, we anticipate we will consolidate this new entity going forward. As a result, you'll see 100% of the capital costs flowing through our CapEx, but you'll also see as a minority interest the contributions from Franco-Nevada going through.

That's why I encourage everybody to focus on the net. There's $275 million that we're projecting for this year. Obviously, we've indicated we expect to receive $220 million from Franco for their buy-in during the fourth quarter. So, that net there is only $50 million. As you go forward, you'll see similar.

Then as the revenue begins coming on, we feel very comfortable about our ability to hit the targets that are defined in our agreement and to realize up to 50% of the revenue stream. So, this is an opportunity to add on to value that we're generating from our core business in a way that we think can be very meaningful.

Doug Leggate -- Bank of America Merrill Lynch -- Managing Director

So, that will be revenue and not barrels in kind, John?

John Hart --Senior Vice President, Chief Financial Officer, and Treasurer

Well, we will reflect it in our production but we'll show revenue as well.

Doug Leggate -- Bank of America Merrill Lynch -- Managing Director

Got it. Thanks, guys.

Operator

Thank you. Our next question comes from Arun Jayaram with J.P. Morgan. Your line is now open.

Arun Jayaram -- J.P. Morgan -- Analyst

Yeah, John, I wanted to see if you could dive deeper on your comments on capital efficiency improving in 2019 and just give us some thoughts on your views. I guess I'm trying to just put that $600 million of CapEx that relates to 2019 production kind of into context.

John Hart --Senior Vice President, Chief Financial Officer, and Treasurer

Well, a portion of that is in SpringBoard, where we're seeing very strong results. Everything that we're doing in the Bakken is on pads. They're pretty much large pads now. You look to the south, we're mostly focused on pads there as well.

You do have some timing of when production and CapEx come on. You've seen some of that this year with the quarter to quarter sequencing. So, we've got about $600 million carrying into next year hitting this year's CapEx. The associated production will come next year and we expect to see strong results.

Harold gave some indications of some drill times and where we're getting to in the south. Our cost per well is remaining in line. We've talked about the productivity and uplift we're seeing in wells with revised type curve with the results that we indicated pretty much across all of our plays -- STACK, SCOOP, the Bakken.

We're seeing exceptionally productive wells and strong uplift for very efficient deployment of capital. We feel good not only about being toward the higher end of our range for this year, but as we indicated earlier in the year and as we're reaffirming now, we expect that to continue improving as we go forward to the next few years to get back to our historical norm. If you look over the last ten years, we've been in the 20% type range.

Arun Jayaram -- J.P. Morgan -- Analyst

Fair enough. So, in the Bakken, John, you talked about exiting the year with 130 wells in progress, including 50 that have already been stimulated. Is that a normalized level of backlog or does that provide extra juice as you think about 2019 production.

Gary Gould -- Senior Vice President of Production and Resource Development

This is Gary Gould. I'll answer that question. At that point, we're pretty much at a standard operational wells in progress number. I think the important part to describe here is how many more net wells we're going to bring online in the second half that will give us that juice for 2019. So, in the second half of this year, we plan to bring on about 80% more net operated wells in the Bakken compared to the first half. So, you can see that juice in the second half of this year that's going to provide strong growth into 2019.

John Hart --Senior Vice President, Chief Financial Officer, and Treasurer

Not only providing strong growth -- I mean, our momentum on oil production specifically entering into 2019. As we referenced in Jack's and mine, we see strong oil production as we move forward through certainly the balance of this year and next year and beyond.

Arun Jayaram -- J.P. Morgan -- Analyst

Gary, if I could just follow-up on that 80% more operated tills -- do you have the 3Q versus 4Q breakdown in the Bakken for the operated tills?

Gary Gould -- Senior Vice President of Production and Resource Development

More of it will be in the fourth quarter than the third quarter. If you look at it in total, about 60% of that will be in the fourth quarter and about 40% of the increase would be in the third quarter.

Arun Jayaram -- J.P. Morgan -- Analyst

Okay. Great. Those are very helpful. Thanks.

Gary Gould -- Senior Vice President of Production and Resource Development

Thank you.

Operator

Thank you. Our next question comes from Brian Corales with Johnson Rice. Your line is now open.

Brian Corales -- Johnson Rice -- Analyst

Good morning, guys. Good update. First question on SpringBoard -- really impressive development. Should we just think about those rigs sitting on that acreage like around two years and then that acreage block is fully completed and then you probably have SpringBoard 2 or another type of development like that? Is that the way to think about it?

Jack Stark -- President

Brian, it obviously depends on the number of rigs that are in there. We're looking at this as a three to four-year development project there. So, these rigs will be in there developing both the Springer and the Woodford-Sycamore layers. We've got three layers that we'll be developing in there.

So, as I think you had mentioned last quarter, it's kind of like mowing the yard. We're starting out on the east side of the unit and doing row one and then we'll come back and get row two and just work it from east to west.

So, it's a long -- this is what I'd call an ideal project when you look at this. We're sitting there and you look at the sheer size of it, number one, you look at the fact that we have 75% ownership in it, we operate it, and we have the marketing infrastructure already in place. This thing is teed up to really deliver some outstanding value to Continental and its shareholders. So, as a project, it's a great opportunity and we're really pleased to have it.

Right now, our plan, as you know, right now we've got seven rigs drilling Springer and four in the Woodford. We plan on increasing the Woodford rig count by up to six. So, we'll have 13 rigs drilling in there. Here, I think probably by October, late October. As far as where does this go after this, as I said, we do have some other projects on the horizon and we'll talk about those at a later date.

Brian Corales -- Johnson Rice -- Analyst

Okay. That's helpful. Then just on slide ten of your presentation, the evolution, I guess, and expansion of the Bakken. There's I guess, some wells drilled further up in Williams that I wasn't aware of. Are those anomalies or are those just less active areas? Can you maybe comment on those?

Jack Stark -- President

No, they're not anomalies. You're talking on page ten here, the wells that have been in drilled in 2015 to the Q1 '18?

Brian Corales -- Johnson Rice -- Analyst

Correct.

Jack Stark -- President

What you're seeing there is people continuing to step out from known results using the newer completion stim technologies and continuing to drive these uplifted performances further north. You can see there's a well up there very close to Divide County that is a very interesting well. It is performing in line with the wells that are obviously the Bakken, what we're seeing down south. So, it's very good, very encouraging for us. That's why we say we continue to see our inventory up here just getting uplifted in its performance based on the expanding footprint of the play.

I thought it was really interesting. If you look at the IHS report, they really have highlighted this expanding what they call new fairway for the Bakken and it just dwarfs the original fairway that was on the map.

Brian Corales -- Johnson Rice -- Analyst

Thanks, guys. Very helpful.

Operator

Thank you. Our next question comes from Kashy Harrison with Simmons Piper Jaffray. Your line is now open.

Kashy Harrison -- Simmons Piper Jaffray -- Analyst

Hi, good morning, everyone. Thanks for taking my questions. So, maybe more of some macro questions -- Harold, you have access to many individuals both in the US and overseas that really shape global policy and have significant impacts in the global economy that most, if not all of us, don't have any access to. Based on your discussions with these individuals, I was just wondering if you could share some thoughts on what the base case expectation is from the resumption of the Iranian sanctions to that country's production and exports moving forward.

Harold G. Hamm -- Chairman and Chief Executive Officer

Due to the amount of production that we're seeing coming out of the US today, we're not seeing a whole lot of impact with that yet. I think it could impact -- it will have some overall upward impact eventually. It's not showing up yet, but I think everybody feels like it will in time. So, you have to be played out.

It's much to soon to see the immediate impact of it, but it will happen. I don't think it's built into the market. Some people say it's already the end of the price and the end of the market, but personally, I don't see that. There was so much discussion around whether it would happen or not, but I don't believe that was built in yet. That's kind of the way I see it.

Kashy Harrison -- Simmons Piper Jaffray -- Analyst

Gotcha. Do you have maybe just a ballpark magnitude or not yet?

Harold G. Hamm -- Chairman and Chief Executive Officer

I think overall, we can see prices run another 10% here before they're leveled off. Obviously, I'm pretty bullish on prices and the macro. We're seeing the Permian, that production being held back in the infrastructure for a year or more. During that term, that's going to be hard to see a lot more oil coming to market. Overall, we feel pretty good. Things could run another 10% higher before it levels out.

Kashy Harrison -- Simmons Piper Jaffray -- Analyst

That's actually a great segue into my tack-on question. In the situation that you just painted with the Permian bottleneck, Iranian sanctions, what role do you see the Bakken as a whole playing to maybe help balance the markets? Do you see a situation where the Bakken may need to rise to the occasion and a lot of DUCs may need to be drilled to avoid some sort of oil spike? Just any thoughts you have on the Bakken next year and moving forward in terms of reactions to all these dynamics.

Harold G. Hamm -- Chairman and Chief Executive Officer

We think that DUCs, complete wells are pretty much gone up there. We're back to a normal situation at Continental. We have some that we basically cleaned out that are not online yet, but overall, ours is done. I think industrywide, what we're seeing up there, the DUCs are left out and gone at this point.

I know some of the completion crews that we let go, they had a little bit trouble flying home. So, that's kind of where that's at. I think as far as playing a role, yes, I think it will as far as being able to improve, continue to improve completion technology and bring some more barrels on. This will be a great value to the Bakken going forward.

Kashy Harrison -- Simmons Piper Jaffray -- Analyst

Got it. If I could just sneak one last in -- there have been a lot of references today to 2019. I was just trying to reconcile to the earlier 15% to 20% production growth framework that was provided back in February. How should we think about that now today given all that's happened and what you guys are seeing today?

John Hart --Senior Vice President, Chief Financial Officer, and Treasurer

As indicated in our transcript, we feel comfortable in the range of 15% to 20%. I think what you're seeing today should give you a lot of comfort that we can certainly deliver that and recognize that 15% to 20% today is on top of a larger amount of production this year. It's on top of a larger exit rage and shows a lot of momentum carrying into next year. So, from a volumetric standpoint, it's more than it was in February.

As we get through the next few month, we'll be firming up our 2019 final drill plans. We certainly have a very good view not only to '19 but for years beyond that. We'll firm that up true it up and I think you'll be pleased with the guidance when we come out in early '19.

Jack Stark -- President

And I'll just tack onto that -- this is Jack -- when you look at our focus on oil at 15% to 20%, it's clearly going to be highly oil-weighted. You'll see that swing as well.

John Hart --Senior Vice President, Chief Financial Officer, and Treasurer

You'll see a change in the mix, which from a volumetric standpoint certainly flows through a BOE percent but it will be oil there.

Kashy Harrison -- Simmons Piper Jaffray -- Analyst

Awesome. Thanks for the color. I really appreciate it. Have a good rest of the day.

Operator

Thank you. Our next question comes from Brian Singer with Goldman Sachs. Your line is now open.

Brian Singer -- Goldman Sachs -- Managing Director

Thank you. Good morning. I wanted to follow-up on a couple of the questions and your comments on Bakken inventory. If we look at that 40-mile gap between the wells that you've highlighted on slide nine and then overlay that onto slide ten, is the area bounded by those 40 miles, the new type curve the acreage should be applied or should it be applied more widely on your acreage, across Williams and even to the north?

You commented earlier that you're seeing some uplift in the non-core in terms of more competitive rates of returns. I wonder if you could talk to any plans you have to expand your drilling further north into Williams and even Divide County?

Jack Stark -- President

Yeah. The type curve that we put out there, you've got to remember that is a blended type curve. You're looking at Middle Bakken 3421342 is the reservoirs we're targeting and in any given area, one of those reservoirs could outperform the other. It is a blended type curve that we're giving you there.

So, some are higher, some are lower than that type curve. As far as how widely you can apply that, we're continuing to drill wells to basically prove how wide that is and complete wells. But what I can tell you is it is expanding. As I've pointed out on slide ten, there is a well up there close to Divide County that conforms very nicely to our uplifted type curve. That should give you a pretty good indication of how well you might be able to apply this uplift.

Brian Singer -- Goldman Sachs -- Managing Director

Great. Thanks. My follow-up is on exploration -- this has always been a core part of your strategy over the years with some big benefits in the mid-Con in particular. Can you just give us an update on the portfolio and what you think the ability is to add another SCOOP or STACK or Springer-type position somewhere in the portfolio? I think the Permian had come up as one area that you were active in, but kind of how close you think you are in any of your exploration plays.

Tony Barrett -- Vice President of Exploration

Hi, Brian. This is Tony Barrett. I'll answer that question. Obviously, we've said over the years we're an exploration company. We're always looking to create value. Over the years, the development of SCOOP and STACK with additional reservoirs that we've identified has driven our program, Springer being a great example of that. We obviously continue to explore all of those areas.

As we've said in the past the Anadarko Basin as well as the Willison Basin are great places to look for oil and gas, multiple targets to go search for. Anadarko Basin, 1,000 feet of STACK pay in the pressure window. So, we're always looking there. As far as other places that we're looking, it's basically everywhere. We'll always continue to do so.

Brian Singer -- Goldman Sachs -- Managing Director

And is there anything that you see that's front and center nearing a point that it is a viable play in a way that Scoops Deck or Springer was at a time that you went forward with that?

Harold G. Hamm -- Chairman and Chief Executive Officer

I might take a shot out that, Brian. We certainly do. Jack has mentioned a couple of other areas that we'll be talking a great deal more on in the next quarter. Certainly, we're testing and it's looking very promising as well. We'll be bringing those to you.

Brian Singer -- Goldman Sachs -- Managing Director

Thank you very much.

Operator

Thank you. Our next question comes from John Freeman with Raymond James. Your line is now open.

John Freeman -- Raymond James -- Managing Director

Hi, guys. The first question on the new minerals venture -- I understand right now it's focused on the SCOOP/STACK, but does the framework allow it to go to the Bakken as well?

John Hart --Senior Vice President, Chief Financial Officer, and Treasurer

This particular framework is focused on SCOOP and STACK. So, if we expand it -- they own minerals outside of this. We certainly have the opportunity to acquire minerals outside of this as we choose. If we were to do something in concert with each other, that would require a new agreement, but there's certainly nothing prohibiting that.

John Freeman -- Raymond James -- Managing Director

Got it. I want to follow-up on the Springer, where we keep seeing continued efficiency gains. You all highlighted it. You're still looking for another $1 million of savings on the Springer wells. Can you highlight the areas where you think you're going to be able to get those savings from?

Gary Gould -- Senior Vice President of Production and Resource Development

This is Gary Gould. I'll start on the completion side, then turn it over to Pat for the drilling side. On the completion side when we had this type of concentration of operations, we're able to see lots of efficiencies in how many stages we complete in one day, for example, and that will lower our stimulation costs on the drilling side.

Pat Bent -- Senior Vice President of Drilling

Yeah. This is Pat Bent. On the drilling side, one of the things we're seeing is the application of technologies from a logging while drilling perspective. So, we're able to better see boundaries and avoid hazards. So, some of those tools are very new to the market. Actually, having been run in the last month, that opportunity is out there. So, that, in combination with the efficiencies that Gary talked about, could mean upwards of $1 million.

John Freeman -- Raymond James -- Managing Director

Perfect. Thanks, guys.

Operator

Thank you. Our next comes from Neal Dingmann with SunTrust. Your line is now open.

Neal Dingmann -- SunTrust Robinson Humphrey -- Managing Director

Afternoon, guys. Thanks for squeezing me in. Jack, my question is for you if I look at slide 20 that shows some of the returns on your top plays -- I guess folks see primarily on the Springer or SCOOP there. Could you talk about how some of the newer -- let's start with the Springer -- how some of the newer Springer wells are performing in your opinion versus that 1.2 type curve, then maybe the same question for the SCOOP versus that 1.5 curve.

Jack Stark -- President

Yeah. That's a good question. We had our new wells, the Triple H wells, that were brought online in Project SpringBoard on the east side, if you go to page 22 and you look at the lower right-hand side, that shows the Springer with our 1.2 type curve. What you're seeing there, there is a subset of wells in the very beginning of the curve there. You can see they tend to take the average down below the curve just a bit.

Those are from the Triple H unit. That unit is out on the east side of SpringBoard and that's where the Springer is thinner. As you move to the west, it gets thicker and we will see better wells or higher rates of those wells as you move further west across the field. This would be what we would expect.

And 1.2, you've got to remember, it's like I talked about the Bakken -- it's an average of outcomes that we expect going across the play. Into some areas, it's going to exceed that 1.2 clearly, in other areas, it may be a bit lower. That 1.2 is a good average for what we're going to be drilling across the play.

So, as I said, this Triple H was out on the east side in the thinner area and as we move west, we'll see higher rates. So, this is just straight off of our results here. Hopefully, that will answer your question how the performance is. I could talk about the Triple H's by themselves, but you've got to keep them in context of the whole field itself.

Neal Dingmann -- SunTrust Robinson Humphrey -- Managing Director

That's exactly what I was looking for. Thanks, Jack. Just one follow-up on the SpringBoard or around slide 13 -- could you talk about the oil breakdown? I think you said 75%-80% of production would likely be oil from SpringBoard. I'm just wondering is that because you'd be doing more Springer initially and then as you do more Woodford-Sycamore -- again, I think the Woodford is a little bit less oil -- maybe just talk about the composition from either phase one and phase two, Jack.

Jack Stark -- President

Another good point there. Maybe we need to word that slightly differently. The 85% oil is what we're typically seeing out of the Springer. You get down more to that 70%-75% range, maybe 80% in the Woodford. So, what you're seeing there is kind of a break out between on the high-end, it's going to be the Springer at 85% and on the lower ends, it will be in the Sycamore-Woodford, but that will be a little less oily.

Neal Dingmann -- SunTrust Robinson Humphrey -- Managing Director

Very good. Thanks so much for the details.

Operator

Thank you. Our next question comes from Brad Heffern with RBC Capital Markets. Your line is now open.

Brad Heffern -- RBC Capital Markets -- Analyst

Hey, afternoon, everyone. Another question on the minerals partnership -- what's sort of the end game for this? Is it really just there to enhance the drilling economics? Earlier in the call, you mentioned there might be a couple billion-dollar valuation on it at some point. Is there the potential for there to be a spend candidate or an IPO candidate sometime in the future?

John Hart --Senior Vice President, Chief Financial Officer, and Treasurer

It has potential for any number of things. The key is it's going to be very valuable. It can certainly fit into an IPO category at some point in the future and capture significant value. It's also a nice asset to hold to maturity. As I indicated, it's going to be cashflow -- it's going to put off a significant amount of cashflow as we go forward and it will convert to a cashflow positive asset and recoup the investment relatively quickly. Either way, it's adding to our economics. It's utilizing our team's expertise and it gives us a great opportunity to approach the future in a number of ways.

Brad Heffern -- RBC Capital Markets -- Analyst

Okay. Then do you have any sort of targets as to what you could potentially get to on the NRI front versus 19 or so that you have now?

John Hart --Senior Vice President, Chief Financial Officer, and Treasurer

I don't think that we would probably want to discuss all that today. We're very focused on it.

Brad Heffern -- RBC Capital Markets -- Analyst

Okay. Thanks.

Operator

Thank you. Our next question comes from Derrick Whitfield from Stifel. Your line is now open.

Derrick Whitfield -- Stifel, Nicolaus & Company -- Managing Director

Thanks. Good afternoon, all and congrats on a strong operational update.

Harold G. Hamm -- Chairman and Chief Executive Officer

Thank you.

Derrick Whitfield -- Stifel, Nicolaus & Company -- Managing Director

Building on Brian's earlier question on the Bakken fairway, to what degree could core fairway extend north and west of the most northern Williams well on page ten based on your understanding of the geology? Could it be 10 to 20 miles of the north and west?

Jack Stark -- President

You're asking great questions. We and others in the industry are continuing to push that envelope. Based on what we know right now and especially keying off the results of the well, I keep pointing to it's on the northeast corner of Williams County and south of Divide, it's quite impressive and it shows it has the ability to expand on up into Divide.

Harold G. Hamm -- Chairman and Chief Executive Officer

This is an area that we got on a [inaudible] acreage up there. It's a very sizable amount of acreage in that area.

Jack Stark -- President

You're looking north. Don't forget to look south of Dunn County. You look down there, we're not done there either.

Derrick Whitfield -- Stifel, Nicolaus & Company -- Managing Director

It's working all along the annex line, but it's north and south?

Jack Stark -- President

Really, what it is, through this technology, we were basically under-stimulating these wells in the past. So, when we're going to 60-stage completions, what we're doing is we're just connecting with the reservoir better and we're finally truly realizing the true resource potential or the ability of Bakken to deliver.

So, I've got a great example. I'll share it with you. This is really interesting. We have a well that we entered. I think it was about a 9,300-foot lateral. We reentered it and it was completed open hole. This goes way back. This was in North Dakota. We went in and reentered the well, drilled it another 665 feet and then lined it and stimulated the well. In the first 60 days, that well made 100,000 barrels and that's more than the well made in the prior ten years.

So, that is about as graphic an example of what the technology is doing to essentially truly access the oil that exists in the Bakken. The Bakken is a tremendous resource. I mean, 100% of the field is in the oil window. It's over-pressured. It's a dry system, really no water. So, it is a system there that is ideal and we were just not really effectively connecting with the reservoir.

So, technology has taken us to a whole new level in this play. I think people are finally starting to understand and get their heads around that. That's what's key. It's basically a renaissance for the Bakken.

Harold G. Hamm -- Chairman and Chief Executive Officer

When we say we, I think that goes for the industry as well. It's not just Continental. It's the entire industry. We work together very well with other operators up there to try to understand this thing and we're closer than we've ever been.

Derrick Whitfield -- Stifel, Nicolaus & Company -- Managing Director

I agree with you guys. It has been quite impressive. Moving over to the SCOOP, you completed several wells in the Sycamore during the second half of '17 and into early '18 as the Sycamore is part of Project SpringBoard. I wanted to know if you guys could share a little more color on the performance of those wells in comparison to the Woodford.

Jack Stark -- President

The Sycamore wells that you're referring to we found tend to mimic pretty well the type of performance we're seeing out of the Woodford in general out there. In Project SpringBoard, we're going to be in an area that's a little bit more highly oil-rich. So, in our development there, we are testing the Sycamore and we're actually going to be defining in our early units out here just the density we can drill in the Sycamore.

So, the performance we expect to be, I'd say, comparable to the Woodford, but on density development, we want to understand that. We'll see in the Williams unit that we have drilling right now, we're drilling some wells into the Sycamore as well as the Woodford and we're going to be monitoring the production there. It will help guide where we go and how densely we drill things going forward.

We're very comfortable, obviously, with the Woodford density. We've been doing that for quite a while. We understand that. The Sycamore, we're a little earlier in that development, but we want to include it our development of SpringBoard. So, we're just testing as we go.

Harold G. Hamm -- Chairman and Chief Executive Officer

I think to maybe add one more comment there, I guess it surprised us to the upside at this point. We're very satisfied with it.

Derrick Whitfield -- Stifel, Nicolaus & Company -- Managing Director

Great. Thanks for all the additional detail.

Operator

Thank you. Our next question comes from Subash Chandra with Guggenheim. Your line is now open.

Subash Chandra -- Guggenheim Securities -- Managing Director

Yeah. I'm curious as you commit to SpringBoard, more Cushing oil versus Bakken oil, if you worry about basin congestion and want to seek to protect that through hedging.

Jack Stark -- President

As far as basic congestion, Ramiro, you might want to step in here, but right now, we're not concerned with that with our access from a gas market standpoint with our Wildcat Pipeline project. We're totally comfortable that it's able to handle the growth that we see in the oil pipeline system that's in there likewise is directly connected to the refinery there. Quite frankly, it's a premium oil they want very badly and it fits their system very well and it's a great relationship that we have. So, from a congestion and marketing standpoint, we don't have that here.

Ramiro Rangel -- Senior Vice President of Marketing

This is Ramiro. From an oil vantage point, the infrastructure is already in there, both from trucking and pipe. Additionally, as we continue to be able to ramp up, we are very confident that any additional infrastructure that is needed will be built. So, we really don't think that's going to be an issue. To reiterate what Jack said, we have a lot of optionality insofar as refiners and Cushing. So, on the crude oil, lots of optionality -- on natural gas, same way. We have capacity on wildcat and then there's options we can avail ourselves on.

Subash Chandra -- Guggenheim Securities -- Managing Director

And then could you summarize what you're seeing dollar per foot on AFEs in the SpringBoard Project from the Springer on down?

Jack Stark -- President

Yeah. We showed that on page 14. So, it's on slide 14, you see the cost that we've seen in terms of dollars per foot. This is complete well cost. So, it includes both drilling and completion. You see we've already seen about a 50% reduction in cost per foot where we are right now. With the additional technologies and efficiencies that we referred to earlier, both on the drilling and completion side, we see the potential for another 10% savings.

Subash Chandra -- Guggenheim Securities -- Managing Director

Okay. Got it. So, the number that I see there is inclusive of all your commentary?

Jack Stark -- President

Yes.

Subash Chandra -- Guggenheim Securities -- Managing Director

Okay. Great. Thank you.

Operator

Thank you. Our next question comes from David Beard with Coker Palmer. Your line is now open.

David Beard -- Coker & Palmer -- Analyst

Good afternoon. Thanks for running the call a little bit over. My first question is a macro question maybe for Mr. Hamm. Given the importance of oil exports to the US, do you see there's any way that successive administration or Congress can stop that?

Harold G. Hamm -- Chairman and Chief Executive Officer

No. In fact, maybe successive administration might, certainly not the one that's there now. In fact, the current administration would like to enhance it. It's been great for the balance of trade, everything else. We're not so dependent on the Middle East as we have been in the past. I just don't see it. I think the further we go down this road, the more everyone is going to realize that today, the US has its own petrol dollars. We're seeing the current administration embrace this more and more every day, realizing the importance of it.

So, I think that will also set up a precedent for the next administrations that come in. So, it won't be just this one. It will be future administrations going forward, seeing the importance of it. It's a tremendous effect today to not be beholden to some other government for your wellbeing. We have the cheapest gasoline prices in the world of any unsubsidized country. So, it's a great situation to supply the market.

David Beard -- Coker & Palmer -- Analyst

I appreciate the color. Then maybe just a micro question for the A&D team -- when you look at the recent asset sales, were they on your list when you identified $1+ billion in asset sells or would something like the Franco deal come in over the transom?

John Hart --Senior Vice President, Chief Financial Officer, and Treasurer

We've had a number of opportunities that have been on that list. The minerals opportunity is something we've been working on for a while. I wouldn't go back to early '16 and say it was on there, but it is an opportunity we've had in our mind and have been working for a bit here. We're making good progress. The key is we're not interested in fire sales. We want to capture appropriate value. We haven't sold much production with our divestitures, but we've been able to effectively execute on those transaction and utilize proceeds to deliver the company.

Jack Stark -- President

You need to remember too these divestitures that we've had have basically been driven by the fact that our inventory is so deep that these are things we don't see ourselves getting to in the next 15 years. There are things that although they may not have as much value to us, they still are very attractive to other operators or other folks out there. As John said, it's driven by the fact that we're so flush with good, high-quality inventory that we're able and willing to divest. We do have some other ones that we will have in the queue as well.

Harold G. Hamm -- Chairman and Chief Executive Officer

I think you can call them multifaceted. There are several different aspects of what we're doing here. This is an awfully good example of that.

David Beard -- Coker & Palmer -- Analyst

Great. Appreciate the time and congratulations on the quarter and the outlook.

Operator

Thank you. Our next question comes from Leo Mariani with National Alliance Securities. Your line is now open.

Leo Mariani -- NatAlliance Securities -- Analyst

Hey, guys. I was wondering if you could talk a little bit about the opportunity set you guys see around the Franco-Nevada deal that you guys did here. Is there a substantial mineral acreage out there still to be captured in SCOOP/STACK over the next couple of years? Obviously, you guys have already done a chunk of that putting that into the vehicle, just trying to get a sense of the scale of this opportunity.

Harold G. Hamm -- Chairman and Chief Executive Officer

Yes. Just like our lease hold position, we continue to acquire and lease every week with a lot of success. Minerals are in the same boat. It's highly competitive, but we've got a great team, a majority of it. We have a current title on it, so it gives us an advantage over anybody else, but it is highly competitive.

John Hart --Senior Vice President, Chief Financial Officer, and Treasurer

The key on it is we're only going to execute on transactions where the valuations are appropriate that provide that longer-term opportunity in a reasonable and balanced way. If those opportunities don't exist, we won't spend the proceeds.

Leo Mariani -- NatAlliance Securities -- Analyst

That makes sense. I guess then incrementally, I don't know if you guys already have some other existing minerals in some of your SCOOP/STACK that maybe get drilled a couple years down the road that would be more of a drop down situation or would it be you guys go out and say, "We're drilling wells another year or two. Let's try to pick up those minerals in advance of the drilling," to make sure I understand what you're targeting. It sounds like it's mostly going to be CLR operating areas.

Harold G. Hamm -- Chairman and Chief Executive Officer

Absolutely. That's been our goal since we started this in mid-2016. That's been our focused to have our drill schedule. We've retained a small amount of minerals outside of the core areas for SCOOP and STACK. Our geologists are continually expanding our area. Who knows what the future holds at this point.

Leo Mariani -- NatAlliance Securities -- Analyst

Thanks, guys.

Operator

As a reminder, ladies and gentlemen, that's * then 1 to ask a question. Our next question comes from Joe Allman with Baird. Your line is now open.

Joe Allman -- Robert W. Baird & Company -- Analyst

Hi, everybody. Thanks for extending the call. On slide ten, if we could look at slide ten for a second, the map on the right, it seems like there's a donut hole among all those wells. I'm just wondering is there a geological reason for that donut hole? Maybe it's more like a Danish.

Jack Stark -- President

In my opinion, no, it's going to be tied to ownership and degree of development already.

Joe Allman -- Robert W. Baird & Company -- Analyst

Got it.

Harold G. Hamm -- Chairman and Chief Executive Officer

And other operators.

Joe Allman -- Robert W. Baird & Company -- Analyst

Okay. That's all I had. Thanks very much, guys.

Operator

Thank you. I am not showing any further questions at this time. I would now like to turn the call back over to Rory Sabino for further remarks.

Rory Sabino -- Vice President of Investor Relations 

Thank you, everyone for joining us today. Please reach out if you have any further questions for the IR team. Thank you.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program and you may all disconnect. Everyone have a wonderful day.

Duration: 84 minutes

Call participants:

Rory Sabino -- Vice President of Investor Relations 

Harold G. Hamm -- Chairman and Chief Executive Officer

Jack Stark -- President

John Hart --Senior Vice President, Chief Financial Officer, and Treasurer

Gary Gould -- Senior Vice President of Production and Resource Development

Tony Barrett -- Vice President of Exploration

Pat Bent -- Senior Vice President of Drilling

Ramiro Rangel -- Senior Vice President of Marketing

Drew Venker -- Morgan Stanley -- Analyst

Doug Leggate -- Bank of America Merrill Lynch -- Managing Director

Arun Jayaram -- J.P. Morgan -- Analyst

Brian Corales -- Johnson Rice -- Analyst

Kashy Harrison -- Simmons Piper Jaffray -- Analyst

Brian Singer -- Goldman Sachs -- Managing Director

John Freeman -- Raymond James -- Managing Director

Neal Dingmann -- SunTrust Robinson Humphrey -- Managing Director

Brad Heffern -- RBC Capital Markets -- Analyst

Derrick Whitfield -- Stifel, Nicolaus & Company -- Managing Director

Subash Chandra -- Guggenheim Securities -- Managing Director

David Beard -- Coker & Palmer -- Analyst

Leo Mariani -- NatAlliance Securities -- Analyst

Joe Allman -- Robert W. Baird & Company -- Analyst

More CLR analysis

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