Continental Resources Inc. Bakken Shale: Evolution of a Giant Oil Field Jack Stark Sr. VP Exploration Feb.16, 2011
Continental Resources Highlights #3 largest oil producer in the Rockies 310MM boe proved reserves MY 2010 (67% oil) 44,775 boepd avg. production Q3 2010 (75% oil) Operate 93% of PV10 $1.3 Billion 2011 CAPEX ~200 net wells; targeting 30% production growth 1,470,000 net undeveloped acres; 483,000 net developed acres 2
CLR Production Growth 17.3% CAGR 2005-2009 MMBoe Guidance for 15-17% growth in 2010 and 30% in 2011. 20.6 7.2 9.0 10.6 82% 12.0 13.6 74% 15.8 75% 79% oil 3
CLR Proved Reserves Growth MMBoe MY2010 Proved Reserves 257 310 117 118 85% oil 135 77% 159 67% 67% Anadarko Wdfd. 5% Other 4% ND Bakken 43% Arkoma Wdfd. 16% Red River Units 19% MT Bakken 13% 4
CLR: Organic Growth Through Exploration and Technology Focus on Unconventional Reservoirs and Resource Plays Red River- ND (1995) Bakken Shale- MT (2003) Bakken Shale- ND (2004) Arkoma Woodford Shale- OK (2006) Anadarko Woodford Shale- OK (2008) Niobrara- CO,WY (2010) Drilled over 800 gross (562 net ) horizontal wells Participated in 575 gross (60 net) non- operated horizontal wells Counties with CLR leasehold 5
CLR: Bakken Shale Leader Largest leaseholder in the Bakken play 865,000 net acres Most active driller 22 operated rigs drilling Pioneered development of the Three Forks reservoir and use of ECO-Pad $955MM Capex for 2011 $845MM drilling 132 net wells 6
Bakken Shale Oil Field SASKATCHEWAN Bakken Shale Oil Field MANITOBA MONTANA NORTH DAKOTA WILLISTON BASIN WYOMING SOUTH DAKOTA
Billion barrels Bakken Reserves: Growing with Technology 25 20 15 Estimated Recoverable Reserves 12.7 20 10 5 0 6.2 4.3 151MM 1995 2008 2010 2011 2011 1995 USGS estimated 151 million barrels of recoverable reserves. 2008 USGS revised estimate to a range of 3 billion to 4.3 billion barrels recoverable. 2010 NDIC added 1.9 billion barrels for the Three Forks in North Dakota. 2011 NDIC revised estimate to potentially 11 billion barrels for ND alone. (Est.1.7 billion for MT) 2011 CLR estimates 20 billion barrels recoverable. 8
Bakken by Comparison Field Country Discovery Date Ghawar Saudi Arabia 1948 140 Rumalia Iraq 1953 22 Cantarell Mexico 1976 11-20 Prudhoe Bay U.S. 1969 13 Tupi Brazil 2006 5-8 Billion Bbls of Reserves Total estimated U.S. Reserves are 19.1 Billion Barrels 9
250 Miles Bakken Petroleum System 200 Miles Over-pressured, basin centered oil field MIGRATED CONVENTIONAL OIL FIELDS Huge continuous oil accumulation ~14,700 square-miles Largest ever assessed by USGS 2,750 hz completions Fault Zone MARGINALLY MATURE BAKKEN 164 active rigs ~1,800 wells being added per year MATURE BAKKEN KITCHEN 10 Oil migration Three Forks CLR acreage Bakken
Cross-section: Bakken Petroleum System SW U.S. MATURE MARG. MATURE CANADA IMMATURE NE BAKKEN KITCHEN CONTINUOUS OVERPRESSURED OIL CELL MIGRATED OIL CONVENTIONAL TRAP 275 Miles 11
Bakken Shale Play 50 Years in the Making 12 Montana 2000 Dual Leg HZ Open Hole Frac 2006 Single leg HZ- Liner/Multi stage frac 1988 Short HZ- No Frac 160 Miles Bakken Shale Producer North Dakota 1953 Vertical (Disc) Approx. Area of Thermal Maturity 1953 Antelope Field - Discovery 52 Vertical Wells 12.9 MMbo & 30.1 Bcf 1970+ Vertical Bail-Out Completions 70+ Vertical completions 1988 Elk Horn Ranch/Bicentennial 192 Hz wells 1988-1993 22.4 MMbo & 51.9 Bcf Short HZ No frac 2000 Elm Coulee 648 Hz wells completed (10/2010) 96 MMbo & 74 Bcf (10/2010) 50,000 Bopd peak production Dual leg HZ wells - Open hole frac 2006 ND-MT 2,075 Hz wells completed (10/2010) 300 Mbopd and 210 MMcfd (10/2010) Single leg HZ -Liner/multi-stage fracs
1980 1985 1990 1995 2000 2005 2010 Daily Oil Production (BOPD) Wellcount Bakken Production History (MT&ND) 300,000 ~300 MBO 6,000 250,000 5,000 200,000 Single Leg HZ Liner / Multi-stage Frac 4,000 150,000 ~2,300 WELLS 3,000 100,000 50,000 HZ wells No frac Multi Leg HZ Open hole Frac 2,000 1,000 0 0 13
Devonian 100 Feet Mississippian Bakken Type Log Gamma Ray Resistivity Porosity Lodgepole Upper Shale Drilling Target Middle Bakken Bakken Shale Lower Shale Drilling Target Three Forks 8% Type log, Divide Co., ND
Days on Well CLR Rig Count Drilling Efficiencies Realized Over Time 100 90 80 1280 Acre Spacing 18,500-21,000 TMD 9500 avg. effective lateral CLR rig count 20 18 16 70 14 60 50 12 10 40 30 20 10 Days on well 8 6 4 2 0 Jun-08 Sep-08 Dec-08 Mar-09 Jul-09 Oct-09 Jan-10 May-10 Aug-10 Nov-10 0 15
10,000 deep Typical CLR Completion Completion Technique Plug and perf method 24-30 stage fracs Isolate with swell packers and plugs Perforate 6 one foot intervals per stage 6 shots per foot Complete 8 stages per day Volumes and rates per stage 80-100,000# 20-40 sand/ceramic proppant Lead with 25-40,000# 40-70 sand 2,000 bbls of fluid (X-link gel) Treating pressures 5,000-8,500 psi @ 40 bbls / minute $6.5MM CWC 6 wellbore Swell packers 4 1/2 Liner 7 Casing 16 9,500 lateral
Boepd Increasing Production Rates Though Technology Open Hole CLR ND Operated Bakken Completions 24 + stage fracs 30-day avg. 90-day avg. 603 466 3Q:623 2Q:454 150 122 205 185 209 201 17
EUR, MBOE Bakken: Higher IPs = Higher EURs 1600 1400 1200 1000 800 600 518 MBOE MODEL 400 200 18 0 0 200 400 600 800 1000 1200 1400 30-Day IP, BOEPD
EUR, MBOE More Stages Improve EURs 1,600 1,400 1,200 1,000 800 600 518 MBOE MODEL 400 200 19 0 0 5 10 15 20 25 30 35 # of Frac Stages
Rate of Return % Bakken Economics 70 60 CWC: $6.5MM EUR: 518 MBoe Bakken IRR 50 40 30 20 20 50 60 70 80 90 100 110 * Net of differentials. NYMEX Oil Price, $/BBL
TFS MB TFS MB TFS MB TFS MB ECO-Pad Development Reduced surface footprint Est. 10% lower D&C cost per well 1,280-acre spacing unit #1 200 set-back 2 miles (10,560 feet) Increased lateral length results in harvesting more reservoir 200 set-back 21 1,280-acre spacing unit #2
Continental s ECO-Pad Technology 22
ECO-Pad Development Dual-zone development 8 Potential wells per 1,280-acre unit 4 Middle Bakken and 4 Three Forks 4.1 MMBoe total EUR 518 MBoe EUR X 8 wells Lodgepole Upper Bakken shale Middle Bakken 1,320 10,000 below surface Lower Bakken shale Three Forks 660 660 Multiple fracture stages 1,320 with a 500 stimulation radius 23
Tremendous Growth Potential for ND and MT Currently 164 rigs drilling in the Bakken Adding approximately 1800 new wells per year NDIC projects 700,000 bopd by 2014-17 (Jan. 7,2011) 2,000 drilling permits and up to 200 rigs in 2011 1,050 2,700 new wells per year 21,000 50,000 new wells in next 10-20 years IHS anticipates up to 1,000,000 bopd by 2020 24
Questions? 25