CLR's Bakken Density Pilot Project Update -- 2Q14 Earnings Press Release -- August 5, 2014

Press release here.

In 2013, the Company embarked on a plan to test different areas across the Bakken field to determine what well density and pattern best maximizes crude oil recovery and returns.  In all, the Company has initiated seven density pilot projects, all designed to include the Middle Bakken and Three Forks One, Two and Three ("TF1", "TF2", "TF3") across a broad section of Continental's approximately 1.2 million net acres of leasehold.  Three of these projects are testing 1,320-foot inter-well spacing and four are testing 660-foot inter-well spacing.  [I assume the "old" "upper Three Forks" is now TF1.]

The Hawkinson 1,320-foot pilot project was the first to be completed by the Company and was announced as a fourth quarter 2013 completion, followed by additional 1,320-foot spacing tests at the Rollefstad and Tangsrud units.  The Hawkinson pilot continues to be a strong producer with all of the 14 wells trending on average 50% above the Company's 603,000 Boe EUR model after 190 to 250 producing days. 

The Rollefstad pilot is also performing well, with 10 of the 11 wells on the unit producing an average rate that is 10% above the 603,000 Boe EUR model after approximately 60 producing days.  Four wells at the Rollefstad unit are still flowing naturally without the aid of artificial lift. 

The Tangsrud pilot was designed to test the extent of the Lower Three Forks productive footprint in the northern portion of the play.  On average the MB and TF1 wells are producing similarly to neighboring wells in the area.  The TF2 and TF3 producers in the Tangsrud pilot continue to underperform offset MB and TF1 producers and do not appear to deliver economic results that compete with the Company's substantial inventory of high rate-of-return development opportunities, based on current technology and cost structure. 

In late May 2014, the Company began producing its first 660-foot inter-well spacing test at the Wahpeton pilot in McKenzie County, North Dakota.  The new wells were completed using the Company's standard completion design of 30 stages with 100,000 pounds of proppant per stage.  Initial production rates for the 12 new wells in the unit averaged approximately 1,015 Boe per day, which included three new MB wells averaging approximately 1,730 Boe per day.  

Mr. Bott added, "Continental continues to lead the industry in seeking the optimum density and enhanced completions in order to maximize recovery, enhance returns and increase net present value.  It is too early to estimate recoveries at the Wahpeton pilot; however, we are encouraged by the early performance and potential for 660-foot inter-well spacing."

The three remaining pilot projects are 660-foot inter-well spacing tests that are in various stages of drilling or completion.  These include the Mack, Lawrence and Hartman units, which include a combined 18 new wells and six existing producers.  The new wells are expected to be completed in the second half of 2014.