Growth Strategy 
Continental seeks to build shareholder value by finding and developing crude oil and natural gas reserves in a way that generates attractive returns on investment. The principal elements of our growth strategy are:
Growth through low-cost drilling.
Substantially all of our capital expenditures are invested in drilling projects and the acquisition of acreage and seismic data. Since early 2005, 97% of reserve additions have come through drilling and 3% through acquisition. We focus on unconventional plays that have a significant potential for repeatable success in drilling over a large geographic area, greatly reducing dry hole risk and providing us more control over the costs of drilling and production.
Internally generate prospects.
Our technical staff has generated substantially all of the strategic drilling prospects in which we have invested. In addition, as an early entrant in new and emerging plays, such as the Bakken Shale in North Dakota and Montana, we have been able to acquire large undeveloped acreage positions at lower costs than later entrants. In the Bakken, Continental is the largest leaseholder with approximately 605,000 acres at June 2009.
Focus on unconventional oil and natural gas resource plays.
Our expertise in horizontal drilling, advanced fracture stimulation and enhanced recovery technologies has enabled Continental to commercially develop unconventional oil and natural gas resource plays, including the Red River B dolomite and Bakken Shale in the Rockies and the Arkoma Woodford in southeast Oklahoma. These three plays accounted for approximately 82% of our oil and gas production in the second quarter of 2009. The North Dakota Bakken and Arkoma Woodford plays are clearly in the early stages of development, with many years of drilling opportunities ahead.
Acquire significant acreage positions in new and developing plays.
As of 2009, we held more than 1.1 million net undeveloped acres in unconventional plays. Our technical staff is focused on identifying new unconventional oil and natural gas resource plays, such as the Atoka play in Western Oklahoma and the Marcellus/Huron/Rhinestreet in the Appalachian Basin, where significant reserves might be developed through horizontal drilling and advanced fracture techniques.
Strengths
Focus on oil.
At year-end 2008, crude oil comprised 67% of our total proved reserves and 76% of our annual production. Although we are pursuing natural gas opportunities, we continue to believe that crude oil valuations will be superior to natural gas valuations on a relative Btu basis.
Continental Resources is one of the largest producers in the Red River Units, with our primary position being in the Cedar Hills Units, the 6th largest onshore, Lower-48 oil field in the United States. We are also the largest leaseholder in the Bakken Shale play, the largest assessed oil play in the United States, according to the United States Geological Survey.
Large drilling acreage inventory.
As of mid-2009, we had identified more than 750 prospective drilling locations in the North Dakota Bakken, based on 640-acre spacing; and 500 potential drilling locations in the Arkoma Woodford, based on 80-acre spacing. If down-spacing is eventually justified, our drilling inventory in these plays will increase significantly.
Continental Resources is the largest leaseholder in the Bakken Shale of North Dakota and Montana with 605,000 net acres and a leading operator in the Arkoma Woodford, with 47,000 net acres under lease.
Other large acreage positions in unconventional plays as of May 2009 include:
- Anadarko Woodford (OK), 118,000 acres;
- Atoka (OK), 28,000 acres;
- Appalachian Basin (PA, OH, WV), 93,000 acres;
- Haynesville (LA), 24,000 acres.
Continental drilled its first horizontal well in 1992 and since then has drilled more than 650 horizontal wells, a critical expertise in the development of resource plays. Horizontal drilling was the key to the economic development of the Red River Units, which includes the Cedar Hills Units, the 6th largest onshore oil field in the Continental U.S.
Today we continue to intensify secondary recovery efforts in the Red River Units, with plans to achieve peak production in this field of 17,000 net Boepd in mid-2010, compared with production of 14,092 Boepd in the second quarter of 2009.
Operating control over most assets.
Continental operated 91% of our PV-10 assets as of year-end 2008. Operating control enables us to more effectively manage drilling costs and the timing of the exploration and development of our properties, including the drilling and fracture stimulation methods used.
Experienced management team.
Our senior management team, starting with Chairman and CEO Harold Hamm, has decades of experience in the oil and gas industry. Mr. Hamm founded Continental in 1967, and since then has assembled a senior management team whose member’s average almost three decades of energy industry experience. In addition, at December 31, 2008, our technical staff included 27 petroleum engineers, 17 geoscientists and 11 landmen, who as a group average 20 years experience in the industry.
Strong financial position.
As of August 6, 2009, Continental had outstanding bank debt of $522 million. We have ample liquidity to support operations, with total commitments of $750.0 million on our revolving credit facility. Our strong, conservatively managed balance sheet enables us to fund capital expenditures out of our growing cash flow and, for most of our history, to avoid hedging our production.