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FIRST SHALE OIL DOMINO TO FALL: More to Follow

FIRST SHALE OIL DOMINO TO FALL: More to Follow

In a stunning news release, Continental Resources, the largest shale producer in the Bakken, is shutting in most of its production in the region.  That is one hell of a lot of output to shut-in as Continental Resources was producing over 200,000 barrels per day in the Bakken at the end of 2019.

From the data on Shaleprofile.com, Continental Resources had over 2,200 wells in the North Dakota and Montana Bakken producing oil and gas during February this year.  How many wells will Continental’s Harold Hamm shut in the Bakken??  And how many will be brought back online, at to what cost, when the market recovers??

According to Reuters, Continental Resources halts shale output, seeks to cancel sales:

April 23 (Reuters) – The largest oil producer in North Dakota has halted most of its production in the state, notifying some customers it would not supply crude at current pricing, according to people familiar with the matter.

Continental Resources Inc, the company controlled by billionaire Harold Hamm, stopped all drilling and shut in most of its wells in the state’s Bakken shale field, said three people familiar with production in the state. North Dakota is the second-largest oil-producing state in the United States after Texas.

This is terrible news for the U.S. Shale Oil Industry because $200 billion in debt is due over the next four years.  How are they going to repay this debt if shale companies stop drilling and shutting in production??

If we look at the top five shale oil producers in the Bakken, Continental Resources was clearly ahead of the pack:

This chart from Shaleprofile.com shows that Continental Resources produced more than 200,000 barrels per day in the Bakken at the end of 2019.  Hess, which is the second-ranked company, followed by a wide margin at 145,000 barrels per day.  Interestingly, the third-largest producer in the Bakken is Whiting Petroleum that just filed for Bankruptcy on April 1st.

…click on the above link to read the rest of the article…

CONTINENTAL RESOURCES: Example Of What Is Horribly Wrong With The U.S. Shale Oil Industry

CONTINENTAL RESOURCES: Example Of What Is Horribly Wrong With The U.S. Shale Oil Industry

According to Continental Resources website, it labels itself as America’s oil champion.  To be a champion, one is supposed to be winner.  Unfortunately for Continental, it’s taking a serious beating and is a perfect example of what is horribly wrong with the U.S. Shale Oil Industry.

During the beginning of the U.S. shale energy revolution, the industry stated it would make the United States energy independent.  The mainstream media picked up this positive theme and ran with it.  Americans who wanted to believe in this “Growth forever” notion, had no problem going further into debt to buy as much crap as they could to fill their homes with and additional rental storage units.

For several years, the U.S. Shale Revolution seemed like it was going to defy the laws of gravity (and finance) to provide the country with limitless oil production forever.  However, something started to go seriously wrong as these shale oil companies reported their financial earnings.  One by one, these oil companies financial losses and debts continued to pile up.

And a perfect example, or the “Poster child”, of what is horribly wrong with the U.S. Shale Oil Industry is none other than Continental Resources.

Again, if you go to Continental Resources website, they proudly label themselves as “America’s Champion Oil Company”:

(courtesy of Continental Resources)

Maybe Continental was America’s oil champion at one time, however if we look at their financial results, they have been receiving some serious blows to their mid section.  Looking at the company’s free cash flow since 2010, it isn’t a pretty picture:

From 2010 to 2016 YTD (year to date – Q3 2016), Continental (ticker CLR) has spent a stunning $7.6 billion more on capital expenditures (CAPEX) than they made in operating cash.  Of course this had a negative impact on their balance sheet.

…click on the above link to read the rest of the article…

“Miracle of American Oil”: Continental Resources Courted Corporate Media to Sell Oil Exports

“Miracle of American Oil”: Continental Resources Courted Corporate Media to Sell Oil Exports

document published by the Public Relations Society of America, discovered by DeSmog, reveals that from the onset of its public relations campaign, the oil industry courted mainstream media reporters to help it sell the idea of lifting the ban on crude oil exports to the American public and policymakers.

Calling its campaign the “Miracle of American Oil,” the successful PR effort to push for Congress and the White House to lift the oil exports ban was spearheaded by Continental Resources, a company known as the “King of the Bakken” shale oil basin and founded by Harold Hamm. Hamm served as energy advisor to 2012 Republican Party presidential candidate Mitt Romney.

Miracle of American Oil

Image Credit: Public Relations Society of America

The campaign launched on December 16, 2013, the 40th anniversary of the Organization of the Petroleum Exporting Countries (OPEC) oil embargo, and won the prestigious PRSA Silver Anvil Award.

According to the document, submitted to PRSA to detail the logistics and reach of the PR effort, it was “designed to influence public policy and/or affect legislation, regulations, political activities or candidacies — at the local, state or federal government levels.”

And it all began with a kick-off dinner in Washington, D.C., hosted by Continental Resources and attended by some of the most influential mainstream media energy reporters in the United States.

Regular readers of the Washington oil and gas industry beat will find the names of the dinner attendees, disclosed in the document, familiar.

Miracle of American Oil

Image Credit: Public Relations Society of America

“The campaign not only served as a catalyst to correct public misconceptions, but it also propelled crude oil exports to the top of the U.S. Senate’s agenda,” Continental boasted on the PRSA document.

…click on the above link to read the rest of the article…

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