The company will be reducing its average rig count from 9 to approximately 3 in the Bakken and 10.5 to approximately 4 in Oklahoma. The company has taken action to implement cost saving initiatives across its operations as part of its ongoing commitment to remain free cash flow positive.
"With a solid balance sheet, peer-leading operating costs and minimal long-term service or supply contracts, Continental will remain flexible and nimble as we optimise development and monitor market conditions," said Bill Berry, CEO. "Continental has a proven track record of adjusting activity and delivering cost savings to maximise cash flow generation in lower price environments."
Harold Hamm, Executive Chairman, said, "This budget adjustment has been precipitated by the collapse of crude oil prices due to the market manipulation of Saudi Arabia and Russia. Illegal dumping of crude oil by these countries began earlier this month at a time of low demand during this unprecedented pandemic of Coronavirus. The US Department of Commerce has been asked by U.S. Senator James Inhofe, Chairman of the Senate Armed Services Committee, to initiate an immediate investigation and to take action under Section 232 of the Trade Expansion Act of 1962 to protect national security and counter this illegal activity. We believe this is a short demand cycle which could see some near-term correction when this illegal dumping practice is halted."
With the revised budget, the company anticipates 2020 production to be down less than 5% y/y. The company plans to provide additional details surrounding its 2020 guidance updates as part of its 1Q20 earnings release, based on its ongoing evaluation of evolving business and market conditions.
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/09042020/continental-resources-revises-2020-capital-budget/