Continental Resources said it has made a 55% cut in its capital spending budget, dropping it to $1.2 billion as it reduces the number of rigs drilling in North Dakota from nine to three.
The company has taken action to implement cost saving initiatives across its operations as part of its ongoing commitment to remain free cash flow positive.
Despite low crude oil prices, the largest operator in the Bakken estimates 2020 overall production in North Dakota and Oklahoma will be down only 5%.
“This budget adjustment has been precipitated by the collapse of crude oil prices due to the market manipulation of Saudi Arabia and Russia. Illegal dumping of crude oil by these countries began earlier this month at a time of low demand during this unprecedented pandemic of Coronavirus,” said Executive Chairman Harold Hamm. “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.”
“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,” said CEO Bill Berry.