OKLAHOMA CITY, Feb. 10, 2016 /PRNewswire/ — Continental Resources, Inc. (NYSE: CLR) (the “Company”) today announced proved reserves of 1.23 billion barrels of oil equivalent (Boe) at December 31, 2015, compared with year-end 2014 proved reserves of 1.35 billion Boe. Year-end 2015 proved reserves were 57% crude oil, 87% operated by the Company, and 43% proved developed producing (PDP).
Harold Hamm, Chairman and Chief Executive Officer, commented, “The 9% year-over-year reduction in our proved reserves during 2015, compared with an approximately 50% reduction in crude oil prices, clearly validates the premier quality of Continental’s inventory of assets.”
Total production for full-year 2015 was 80.9 million barrels of oil equivalent (MMBoe), or 221,700 Boe per day, an increase of 27% compared to full-year 2014. Crude oil accounted for 66% of total 2015 production, or 53.5 million barrels of oil. Natural gas production for the year was 164.5 billion cubic feet.
Continental’s year-end 2015 proved reserves had a net present value discounted at 10% (PV-10) of $8.0 billion. The Bakken play in North Dakota and Montana accounted for 663 MMBoe of Continental’s year-end 2015 proved reserves, with a PV-10 value of $4.4 billion, or 56% of total proved reserves PV-10. The SCOOP Woodford and SCOOP Springer plays in Oklahoma accounted for 413 MMBoe of Continental’s year-end 2015 proved reserves, with a PV-10 value of $2.5 billion, or 31% of total proved reserves PV-10. The Company completed its initial wells in the over-pressured window of the Oklahoma STACK play in the past year.
Proved reserves finding cost was an average $9.87 per Boe for 2015. Production reduced 2015 proved reserves by 81 MMBoe, while drilling activity added 253 MMBoe. The conversion through drilling activity of proved undeveloped assets (PUDs) moved 81 MMBoe from the PUD category to the PDP category.
PDP reserves increased 6% to 521 MMBoe at December 31, 2015, compared with year-end 2014. The Company had 1,860 gross (995 net) PUD locations at year-end 2015, with the Bakken accounting for 1,292 gross (705 net) PUD locations. Included in these PUD reserves are 179 gross operated (125 net) drilled but uncompleted wells (DUCs), representing 91 MMBoe in proved reserves. These DUCs have completion and equipping capital remaining to be invested to produce the additional PUD reserves.
The Company’s 2015 price deck for calculating proved reserves, before adjustment for location and quality differentials, was $50.28 per barrel of crude oil and $2.58 per MMBtu for natural gas, compared to the 2014 price deck of $94.99 per barrel for oil and $4.35 per MMBtu for gas.
The Company’s year-end 2015 proved reserves reflected a net 297 MMBoe in negative revisions for the year, the largest component of which involved price revisions of 251 MMBoe. The next largest component involved de-booked and expired PUDs of 98 MMBoe, primarily on Bakken acreage outside the Company’s core leasehold in the play. Partially offsetting these and 46 MMBoe in other negative revisions were 98 MMBoe in positive adjustments for reduced lease operating expense and other factors.
Non-GAAP Financial Measure
The Company’s PV-10 value, a non-GAAP financial measure, is derived from the Standardized Measure of discounted future net cash flows, which is the most directly comparable financial measure computed using U.S. GAAP. PV-10 generally differs from Standardized Measure because it does not include the effects of income taxes on future net revenues. The Company believes the presentation of PV-10 is relevant and useful to investors because it presents the discounted future net cash flows attributable to proved reserves held by companies without regard to the specific income tax characteristics of such entities and is a useful measure of evaluating the relative monetary significance of crude oil and natural gas properties. Investors may utilize PV-10 as a basis for comparing the relative size and value of the Company’s proved reserves to other companies. PV-10 should not be considered as a substitute for, or more meaningful than, the Standardized Measure as determined in accordance with U.S. GAAP. Neither PV-10 nor Standardized Measure represents an estimate of the fair market value of the Company’s crude oil and natural gas properties.
The Company has not provided a reconciliation of its PV-10 to Standardized Measure in this release because final income tax information for 2015 is not yet available. The Company will provide its customary reconciliation of PV-10 to Standardized Measure in its forthcoming Form 10-K for the year ended December 31, 2015 to be filed with the SEC.
About Continental Resources
Continental Resources (NYSE: CLR) is a top 10 independent oil producer in the U.S. Lower 48 and a leader in America’s energy renaissance. Based in Oklahoma City, Continental is the largest leaseholder and one of the largest producers in the nation’s premier oil field, the Bakken play of North Dakota and Montana. The Company also has significant positions in Oklahoma, including its SCOOP Woodford and SCOOP Springer discoveries and the STACK and Northwest Cana plays. With a focus on the exploration and production of oil, Continental has unlocked the technology and resources vital to American energy independence and our nation’s leadership in the new world oil market. In 2016, the Company will celebrate 49 years of operations. For more information, please visit www.CLR.com.