Continental has increased its 2009 capital expenditures budget by 42 percent to $390 million, citing the strengthening of crude oil prices and resulting increased cash flow in the second quarter of the year. Along with funding increased drilling operations, the Company plans to continue reducing the level of borrowings under its credit facility in the second half of the year.
Capital expenditures were $73 million for the second quarter of 2009 and $227 million for the first half of 2009. Looking to the second half, the Company plans to apply almost all of its additional capex spending to drilling operations in the North Dakota Bakken.
Under its original $275 million capex budget for 2009, the Company would have had only one operated rig active in the final four months of 2009. Now, the Company plans to keep the current total of four operated drilling rigs active through September, with a fifth added in October and a sixth in November. All additional rigs will be added in the North Dakota Bakken, and the single rig in the Arkoma will remain.
"The revised budget will enable us to build production momentum as we enter 2010," Mr. Hamm said. "We have only one drilling rig on long-term contract, so if crude oil prices change significantly, we will be able to adjust."
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