Thu Jul 10, 2008
By Chakradhar Adusumilli
BANGALORE, July 10 (Reuters) – Shares of Continental Resources Inc (CLR) rose as much as 20 percent to a life high, a day after the company said its second crude oil well in the Bakken Shale area of North Dakota reported a higher flow rate than its first.
The oil and gas explorer’s flow rate for the second well was about 58 percent higher than the first, which flowed at an average rate of 693 barrels of crude oil equivalent per day in its initial week of production in May.
The second well, Mathistad 1-35H, began production on July 4 and flowed at an average rate of 1,095 barrels of crude oil equivalent per day, with 90 percent of production being crude oil and 10 percent natural gas.
Natixis Bleichroeder analyst Curtis Trimble said the latest results from the Three Forks/Sanish formation increased the productive profile of the Bakken Shale area.
“Future wells will be closer to the 600 to 1000 barrel a day level versus previous wells that were averaging about 450 barrels a day,” Trimble said by phone.
The analyst, who maintained his “hold” rating, raised his price target on the company to $78 from $75 a share, citing higher estimated commodity prices.
Continental is the largest leaseholder in the Bakken Shale play with about 500,000 acres in North Dakota and Montana.
In April, the U.S. Geological Survey estimated about 3 billion to 4.3 billion barrels of undiscovered, recoverable crude oil in the North Dakota and Montana Bakken Shale play.
Shares of the company, which went public last May, were up $12.02 at $77.28 in afternoon trade on the New York Stock Exchange. They are up more than 400 percent since their debut on the back of rising crude oil prices and oil discoveries.