What: Continental Resources' (NYSE:CLR) stock rallied in May, up more than 10% for the month. Crude prices helped ignite that rally, with oil finishing up 7% and just under $50 a barrel. That said, crude wasn't the only fuel driving the stock higher last month.

So what: The main fuel driving last month's surge was Continental Resources first-quarter earnings report. While the company reported a slightly steeper loss than had been expected, its production was strong enabling the company to raise its full year output guidance. The company now expects to produce between 205,000 to 215,000 barrels of oil equivalent per day, or BOE/d, this year, which is well above its initial estimate of 200,000 BOE/d. What's remarkable about that upward revision is that Continental Resources doesn't need to invest any incremental capital to achieve that amount.

One of the driving factors behind the company's strong production performance is its STACK play. In fact, the company announced that it had completed an industry record STACK well during May, which also came in at the lowest costs ever for the company.

The STACK play in Oklahoma has become one of the hottest oil plays in the country, largely because the wells are relatively inexpensive to drill and highly productive leading to robust drilling returns even at low oil prices. Those features recently led Newfield Exploration (NYSE:NFX) to pay $470 million to acquire an additional 42,000 acres in the play, boosting its total position in the region to 350,000 acres. That was a very rich price to pay, working out to more than $10,000 an acre, especially considering that Newfield Exploration paid less than $3,000 an acre for its cumulative acquisitions in the play to date. That said, like Continental Resources, Newfield Exploration has seen improving wells costs and margins, which have significantly increased the value of the play.

Now what: Continental Resources is on pace to have a much stronger year than initially expected. While that's partially due to improving oil prices, the company is also getting stellar results out of its STACK play, which is driving improved production at no extra cost. That sets the company up well for the future, as long as oil prices don't take another steep dive.

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