Essential Facts:
| 1. | 2Q09 production in the Montana Bakken was 6,105 Boepd, compared with 6,363 Boepd in the first quarter of 2008. This reflected the decline in drilling activity as crude oil prices weakened in late 2008. |
| 2. | Montana Bakken production accounted for 16% of Continental’s in 2Q09 production. |
| 3. | The Montana Bakken accounted for 28.2 MMboe in year-end 2008 proved reserves, or 18% of companywide proved reserves. |
| 4. | As of June 30, 2009, Continental’s leased acreage in the Montana Bakken totaled 166,000 net acres. |
| 5. | In 2008 the Company began down-spacing to 320-acre infield drilling in the Montana Bakken. At year-end 2008, we had identified 57 undrilled 320-acre infield locations on our acreage. |
| 6. | As of August 2009, the Company had no drilling rigs operating in the Montana Bakken. |
Montana Bakken Production History (Boepd)
| 2007 | 2008 | 2009 | ||||
| 1Q | 7,685 | 6,678 | 6,144 | |||
| 2Q | 7,890 | 6,363 | 6,105 | |||
| 3Q | 7,637 | 6,187 | 5,581 | |||
| 4Q | 7,244 | 6,410 |
Our Montana Bakken production is located in the Elm Coulee field in Richland County. The Energy Information Administration lists Elm Coulee as the 16th largest onshore, Lower-48 field in the United States ranked by liquid proved reserves. From our first well in August 2003 until year-end 2008, we had completed a total of 156 gross (100.2 net) wells in the field.
The field was developed exclusively with horizontal drilling and has been substantially drilled on 640-acre spacing. During 2008, we began to further develop our acreage in the field on 320-acre spacing and had identified 57 undrilled 320-acre infield locations on our acreage as of year-end 2008. Out of the 22 gross (16.2 net) wells we drilled in the field during 2008, 12 gross (10.3 net) were 320-acre infield wells. These wells are performing in line with our expected reserve model of 279 MBoe per well.
In December 2008 we initiated a secondary recovery pilot project, using carbon dioxide injection, to evaluate the potential to increase oil recovery from the Montana Bakken reservoir. Laboratory tests indicate this technique is feasible and could increase oil recovery from the Bakken reservoir. Using a technique known as the huff-and-puff method, we injected CO2 in January 2009, then allowed the CO2 to soak into the reservoir. We are currently flowing the CO2 and associated fluids back from the well. Production from the well will be measured and the performance will be analyzed to assess the incremental recovery and economics of the technique.
As of year-end 2008, we held 131,422 gross (101,010 net) undeveloped acres in the Montana Bakken play within and adjacent to the Elm Coulee field. In early 2009, we suspended drilling in the Montana Bakken due to low crude oil prices.