Harold Hamm: Almost Twice as Much Oil in the Bakken/TFS As Prudhoe Bay, Alaska

Some comments on CLR's third quarter corporate presentation:

Slide 4: hedges in place to cover CAPEX program

• My back-of-the-envelope calculations: 22 rigs x 10 wells/year/rig x $6 million/well = $1.3 billion
• Hedges: 12.1 million bbls at 85.34, plus natural gas = $1.1 billion
• Yes, CLR has the cash flow to cover the CAPEX program

Slide 5: 15% growth in 2010; 30% growth in 2011

• 17% average growth between 2005 and 2009
• 15% over five years doubles the size of the company and now CLR is talking of 30% next year

Slide 6: growth in reserves in ND Bakken -- 43%

Slide 7: 24 billion barrels of recoverable oil

• Far outstrips USGS estimate of 3 billion
• NDIC estimate: 11 billion
• Be careful: ND-only Bakken vs entire Bakken in Williston Basin; need to compare "apples to apples"
• Prudhoe Bay, North Slope, Alaska: 14 billion barrels; much of it now depleted

Slide 8:

• 864,559 net acres
• My back-of-the envelope calculations: at $5,000/acre = $4.3 billion
• Current market cap = $9.6 billion
• 2 wells/640 acres x 864,559 acres x 500,000 bbls/well (EUR) x $50/bbl = $67.5 billion
• Note: WLL is putting in as many as three, maybe four, wells/640 acres in its best Bakken

Slide 8: 22 operated rigs; most of any producer in ND Bakken; 2 are in Montana

• Four rigs drilling Eco-Pads
• Two rigs on held-by-production units

Slide 10: note the formations shown -- includes the Lodgepole -- why would that formation be shown?

Slide 11: if I understand slide correctly, it takes 60 days to drill the four wells on an Eco-Pad

• Note: it takes about 30 days spud-to-spud non-Eco-Pad wells, based on my estimates; about 120 days for four non-Eco-Pad wells; are Eco-Pads cutting down number of completion days by half
• Also, frack teams in place for successive fracking

Slide 13: average number of frac stages now up to 24

• 90-day average boepd: from 122 in 1Q07 to 454 2Q10; more than 3x increase
• 30-day average boepd: from 150 in 1Q07 to 623 3Q10; more than 4x increase

Slide 14: lots of work to be done

• At 640-acre spacing: only 13% of wells drilled
• At 320-acre spacing: only 7% of wells drilled; 3,400 wells yet to be drilled

Slide 15: takeaway capacity continues to increase

• My hunch: still won't be enough pipeline; increasing rail shipping

Slide 16: Red River units in North Dakota and some in South Dakota, Montana

• Nice, steady cash flow