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Continental Impressed With The Cana-Woodford


Continental has been speaking on its Bakken program a lot these days.  Most recently at the DUO conference in Denver, also the Bakken Day conference a few weeks back.  But it should be noted that they also have an extensive position in the Woodford shale in Oklahoma.  Both the Cana-Woodford to the West (200,000 net acres) and the Arkoma Woodford to the East (47,500 net acres).

They spoke at length about this during their 1Q2010 Earnings Call, particularly on their Cana acreage.

Continental has three rigs running in the NW portion of their Cana acreage, the area near Dewey county.  They are excited about this portion of their acreage because of the high liquid yield, about 200 BPM, and the rich natural gas.  They also compared the Cana-Woodford to the Eagle Ford in that there may be 3 distinct windows, dry gas, wet gas, and oil.  As you go updip, you get more liquids.  They quoted an OPEX figure for this area at $5,000/month and well costs at $6-$6.5MM.

Another attractive detail about the Woodford is the production tax.  They get taxed only 1% on the production until either the well pays out, or 48 months elapses, at which point it raises to 7%, this was my understanding.

Below are two slides detailing their Woodford activity from their February Raymond James Presentation.

And here is a map of the  17 Continental permits issued from the 4Q2009 to present, colored by date issued.  Note they said during the 1Q2010 Earnings Call that they would come back to the Arkoma Woodford when gas prices recover some, they said around $5.

Continue to check the Woodford Shale Unconventional Update for up to date information.

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Justin Birmingham

Justin Birmingham is a Research Analyst at Drillinginfo. He creates proprietary research studies, works with statistical models and manages datasets for the DI Analytics team. Justin earned his Bachelor of Science from Texas State University – San Marcos.