Essential Facts:
| 1. | 2Q09 production in the North Dakota Bakken was 6,286 Boepd, more than 3 times 2Q08 production of 2,082 Boepd. |
| 2. | North Dakota Bakken production in 1Q09 accounted for 13% of Continental’s production in the quarter. |
| 3. | The North Dakota Bakken accounted for 11% of year-end 2008 proved reserves, or 17.5 MMBoe. One year earlier, the North Dakota Bakken accounted for only 5% of proved reserves. |
| 4. | At year-end 2008, Continental leased acreage in the North Dakota Bakken totaled 444,000 net acres, the majority of which is undeveloped. |
| 5. | While most of industry drilling in the North Dakota Bakken has targeted the middle Bakken formation, Continental in May 2008 completed the first well targeting the Three Forks/Sanish (TFS) zone in the play. |
| 6. | In August 2009, the Company announced the successful completion of the Mathistad 2-35H (41% WI) in McKenzie County, a "companion well" drilled to test the Company's theory that the Middle Bakken and Three Forks/Sanish zones act as separate reservoirs in portions of the North Dakota shale play. The Mathistad 2-35H produced at an average 995 Boepd in its initial seven-day test period, making it the Company's strongest operated Middle Bakken completion to date in North Dakota. "The technical data from the Mathistad 2-35H supports our belief that the Middle Bakken and Three Forks/Sanish reservoirs are separate in this area of the play," said Harold Hamm, Chairman and Chief Executive Officer. "The high initial productivity indicates that we tapped new, undrained reservoir rock as we fracture-stimulated the companion well." The Mathistad 2-35H was drilled horizontally in the Middle Bakken (MB) zone approximately 50 feet above and essentially parallel to the horizontal of the Mathistad 1-35H. Continental completed the Mathistad 1-35H in June 2008 in the Three Forks/Sanish (TFS) zone. Prior to drilling the companion well, Continental shut in the Mathistad 1-35H and placed pressure gauges in its horizontal well bore. At the time it was shut in, the Mathistad 1-35H was on pump and producing 187 Boepd. Consequently, the Mathistad 2-35H's initial flow rate was more than four times the rate at which the lower well had been pumping. |
North Dakota Bakken Production History (Boepd)
| 2007 | 2008 | 2009 | ||||
| 1Q | 429 | 1,532 | 4,807 | |||
| 2Q | 924 | 2,082 | 6,286 | |||
| 3Q | 1,119 | 3,444 | 6,943 | |||
| 4Q | 1,382 | 4,401 |
Our 2008 drilling program significantly expanded the proven extent of our North Dakota Bakken acreage along the Nesson Anticline. We completed 98 gross (27.2 net) wells and exited December 2008 producing at an average daily rate of 5,081 net barrels of oil, a 276% increase over December 2007. Natural gas production was 1,744 net Mcf per day in December 2008, an increase of 113% over the same period in 2007.
With only a few exceptions, our 2008 drilling program involved 1,280-acre spacing with long single leg laterals -- up to 9,000 feet in length -- and fracture-stimulated these wells with up to 14 mechanically diverted stages using un-cemented liners and packers. Of significance, we completed 27 gross (10.3 net) Three Forks/Sanish wells during 2008. The TFS formation lies immediately below the Lower Bakken Shale and is known to be productive locally throughout the Williston Basin. Our TFS completions were strategically located throughout our acreage along the Nesson Anticline, spanning a distance of approximately 100 miles north to south. The success of these wells demonstrated the widespread productive potential of the TFS reservoir underlying our acreage.
Our 20 gross (8.9 net) TFS completions that we operated in 2008 had an average initial production rate of 640 gross Boe per day, 17% higher than our average operated Middle Bakken completion in 2008.
Continental participated in completing 28 gross wells (8.1 net) in North Dakota during the first six months of 2009.
Continental participated in completing 28 gross wells (8.1 net) in North Dakota during the second quarter of 2009. Initial production averaged 737 Boepd, a significant increase over the first quarter of 2009 and the average for 2008.
In terms of Company-operated wells, Continental completed nine gross wells (4.8 net) targeting the TFS zone in the play in the second quarter of 2009, including the Kukla 1-21H in Dunn Co., which was the Company's strongest TFS well to date, based on initial test production. As a group, the nine wells' initial test period results averaged 876 Boepd.
-- Kukla 1-21H (65% WI) in Dunn Co. - 1,429 Boepd;
-- McGregor 1-15H (54% WI) in Williams Co. - 1,101 Boepd;
-- Merton 1-3H (45% WI) in McKenzie Co. - 911 Boepd;
-- Lokken 1-2H (54% WI) in Williams Co. - 854 Boepd;
-- George 1-18H (48% WI) in McKenzie Co. - 872 Boepd;
-- Wiley 1-25H (48% WI) in McKenzie Co. - 816 Boepd;
-- Olson 1-8H (81% WI) in McKenzie Co. - 735 Boepd;
-- Thorvald 1-6H (43% WI) in Dunn Co. - 603 Boepd;
-- Lila 1-36RH (50% WI) in Divide Co. - 563 Boepd.
Since the end of the second quarter, Continental has completed three additional TFS wells.
-- Bohmbach 1-35H (76% WI) in McKenzie Co. - 1,367 Boepd;
-- Tangsrud 1-1H (91% WI) in Divide Co. - 834 Boepd;
-- Leonard 1-1H (49% WI) in Williams Co. - 166 Boepd.
The Company also completed a second Middle Bakken well during the second quarter of 2009, the Armstrong 1-24H (74% WI) in Billings Co., which generated initial production results of 356 Boepd.
As of August 2009, we held 439,000 net undeveloped acres in the North Dakota Bakken field. Our 2009 capital expenditure budget of $390 million includes $179 million for drilling 84 gross (32.6 net) wells in the North Dakota Bakken field during the year. We currently have 3 operated rigs in the North Dakota Bakken.