Continental Slashes Budget by 55 Percent
In response to tumultuous market conditions, Continental Resources Inc. has revised its 2020 capital budget to $1.2 billion, which is a 55% decrease in capital spend from the company's original budget of $2.65 billion. Continental will also reduce its average rig count from nine to approximately three in the Bakken and 10.5 to four in Oklahoma.
"With a solid balance sheet, peer-leading operating costs and minimal long-term service or supply contracts, Continental will remain flexible and nimble as we optimize development and monitor market conditions," Bill Berry, Chief Executive Officer, said in a written statement. "Continental has a proven track record of adjusting activity and delivering cost savings to maximize cash flow generation in lower price environments."
With the revised budget, management expects 2020 production to be down less than 5% year-over-year.
"This budget adjustment has been precipitated by the collapse of crude oil prices due to the market manipulation of Saudi Arabia and Russia,” Harold Hamm, Executive Chairman, added in a written statement.”
“Illegal dumping of crude oil by these countries began earlier this month at a time of low demand during this unprecedented pandemic of Coronavirus. The U.S. Department of Commerce has been asked by U.S. Senator James Inhofe, Chairman of the Senate Armed Services Committee, to initiate an immediate investigation and to take action under Section 232 of the Trade Expansion Act of 1962 to protect national security and counter this illegal activity. We believe this is a short demand cycle which could see some near-term correction when this illegal dumping practice is halted," Hamm concluded.
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