Continental Expects Low Oilfield Service Costs in 2019
U.S. shale producer Continental Resources (CLR) expects oilfield services costs to remain low in 2019 as companies that provide drilling and completion work continue to face pressure from softer oil prices, executives said during a company presentation on Tuesday.
Continental is now operating 12 rigs for its SpringBoard development in Oklahoma, down from 14 in the fourth quarter of last year due to improved efficiencies, company executives said while providing an investor update.
Oil prices fell sharply in the fourth quarter last year amid concerns of oversupply and slowing economic growth, trading down to roughly $42 a barrel in December. On Tuesday, benchmark U.S. futures climbed to over $53 a barrel, supported by U.S. sanctions on Venezuela's state-run oil firm.
Continental's SpringBoard project has an estimated 400 million barrels of oil equivalent (boe). The project is on track to grow the firm's net oil production by 10 percent from the third quarter of 2018 to third quarter of this year, the company said on Tuesday.
So far, completed wells in the SpringBoard project are averaging roughly 1,300 boe per day, of which about 81 percent is oil, the company said.
Within the Springer reservoir, which is part of its SpringBoard project, Continental said it has achieved an average of a 10 percent decrease in well costs and will target an additional reduction of six to eight percent this year. Those declines have been driven by reduced drilling costs and cycle time, as well as an increase in stages completed per day.
Continental also said its 2018 fourth-quarter oil production is set to grow by 10 percent versus the third quarter, in line with its prior guidance.
(Reporting by Liz Hampton; editing by Diane Craft)