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Shale Drillers Halt Bakken Fracking as Saudis Send Gloomy Note


Continental Resources Inc., the shale oil pioneer controlled by billionaire wildcatter Harold Hamm, halted all fracking in the Bakken shale formation in the U.S. Williston Basin after posting its first annual loss since the company’s public debut in 2007. Whiting Petroleum Corp. estimates it will leave 73 uncompleted wells in the region by year-end, and another 95 in the Niobrara shale area in the Denver-Julesburg Basin.

Hamm, owner of 76 percent of Continental’s common stock, has responded to plummeting crude prices by slashing his drilling budget and shutting down rigs in the Bakken, where the company is one of the dominant explorers. After spending $1.27 billion on acquisitions to expand its footprint in the region since late 2011, Continental is now seeking to raise cash by attracting investments from joint-venture partners in an Oklahoma discovery known as the Stack.

“For 2016, we will remain patient and disciplined in our activities while striving to enhance shareholder value through continued improvements in our core plays,” Hamm said in an earnings statement Wednesday.

No Crews

Continental said it has no fracking crews currently working in the Bakken. The company continues to drill there, focusing on areas with the highest returns, but will leave most wells unfinished this year.

The company’s fourth-quarter production was 224,936 barrels of oil equivalent a day, down from 228,278 in the third quarter. The averaged realized price for its crude was $34.23 a barrel.

Continental’s full-year 2015 net loss was $353.7 million, or 96 cents a share, compared with a profit of $977 million, or $2.64, a year earlier, the Oklahoma City-based producer said. For the fourth-quarter, the company reported a net loss of $139.7 million, or 38 cents a share. Adjusted for one-time items, the per-share loss beat by 2 cents the 21-cent average estimated loss of 30 analysts in a Bloomberg survey.

The statement was released after the close of regular U.S. equity trading. Continental has fallen about 22 percent so far this year.

19 Comments on "Shale Drillers Halt Bakken Fracking as Saudis Send Gloomy Note"

  1. Truth Has A Liberal Bias on Thu, 25th Feb 2016 11:10 pm 

    Haha fuckin Nony and his retarded shale!

  2. twocats on Thu, 25th Feb 2016 11:34 pm 

    Yeah, but if they can just ramp back up once prices go back up, then one of the main peak oil arguments that “these oil field takes years and years to develop and bring online” goes out the window. Yes it will bring financial chaos, but that shit can just be papered over.

  3. Go Speed Racer on Fri, 26th Feb 2016 12:57 am 

    The unfinished well bores could be useful. As one possibility, we could dump nuclear waste down the holes. Fill in the last 20 feet with a layer of kitty litter.

  4. charmcitysking on Fri, 26th Feb 2016 2:47 am 

    “Yes it will bring financial chaos, but that shit can just be papered over.”

    Yes, with war.

  5. markisha on Fri, 26th Feb 2016 3:33 am 

    and before war PRINT BABY PRINT . I don’t get it , Why just they don’t print them few more trillions to stay afloat.

  6. yoananda on Fri, 26th Feb 2016 5:38 am 

    who will dare to invest in shale after this year fiasco and oil price volatility ?

  7. Nony on Fri, 26th Feb 2016 7:01 am 

    If the price supports positive NPV development, the money will come. Equity markets both public and private will support that. Debt markets may want some extra covenants (e.g. hedging), but they will also support positive NPV projects.

  8. sunweb on Fri, 26th Feb 2016 8:19 am 

    Local Costs of Fracking (see more)

    The impact of natural gas extraction and fracking on state and local roadways
    (Andrew Maykuth, Philadelphia Inquirer)
    As of March 2014 there were approximately 1.1 million oil and gas wells in the United States, a direct consequence of technological advances that have increased domestic energy production to levels unseen since the 1970s. Much of the growth has been in natural gas obtained through hydraulic fracturing, or “fracking,” which involves injecting immense quantities of water and chemicals into the ground to fracture the rock and release deposits that would otherwise be inaccessible.

    “Who Pays the Costs of Fracking?”
    by: Tony Dutzik, Benjamin Davis and Tom Van Heeke
    Frontier Group 2013
    John Rumpler
    Environment America Research & Policy Center
    Weak Bonding Rules for Oil and Gas Drilling Leave the Public at Risk
    Fracking” operations pose a staggering array of threats to our environment and health – contaminating drinking water, harming the health of nearby residents, marring forests and landscapes, and contributing to global warming. Many of thesedamages from drilling have significant “dollars and cents” costs.
    w w w . p e n n e n v i r o n m e n t . o r g / . . . / T h e % 2 0 C o s t s % 2 0 o f % 2 0 F r a c k i n g % 2 0 v P A _ 0 . p d f (see more)

  9. shortonoil on Fri, 26th Feb 2016 8:50 am 

    Continental’s yearly loss $353.7 million. Annualized 4th quarter production 82.10 mb. Loss per barrel $4.31. Average price $34.23, or total cost of production $38.54/ barrel. Interesting, especially since by their own numbers they say it cost $55/ barrel to drill the well. You’ve got to love that creative accounting.

  10. rockman on Fri, 26th Feb 2016 9:24 am 

    Cat – Actually won’t take years per we because these aren’t “fields”. They are trends and production will increase as fast as new wells are drilled. Just as it was a few years ago…just as it’s happening today.

    And if/when oil gets back to $100/bbl new companies and capex will appear again for the same reasons it did during the boom. The dynamics of oil/NG development by pubcos in the US hasn’t changed.

    As far as the cost of oil/NG development to the commons there is also direct benefits: in addition to the jobs and income taxes collected from workers,companies and royalty owners there is also there reference taxes: in 2015, despite lower oil/NG prices, Texas citizens collected $3.2 BILLION and the citizens of ND collected $1.8 BILLION. And that doesn’t include the many $millions collected in administrative fees.

    So a lot of state income to pay for the problems. And if the citizens weren’t satisfied with the trade off they would elect a govt that would terminate any part or all of the process.

    And then there’s the benefit to all US citizens: fed income taxes and a current $30 BILLION per year reduction in our balance of trade deficit.

  11. rockman on Fri, 26th Feb 2016 9:27 am 

    Damn auto correct. Reference tax = severernce tax. LOL.

  12. ghung on Fri, 26th Feb 2016 9:47 am 

    Rock said; “… And if the citizens weren’t satisfied with the trade off they would elect a govt that would terminate any part or all of the process.”

    Jeez, Rock, you have a lot more faith in the people and process than I do. Most people vote for whomever/whatever they are programmed to vote for. They turn on their TVs and see some cute redhead who tells them I’m an Energy voter!, and never look at the details; the same people who think the US is now ‘energy independent’. Besides, by the time they may “get it”, the damage is done, the responsible companies are long gone, whatever revenues were collected have been spent, and the taxpayers are on the hook for cleaning up the mess. But it seemed like a good idea at the time, eh?

  13. Davy on Fri, 26th Feb 2016 11:55 am 

    “… And if the citizens weren’t satisfied with the tradeoff they would elect a govt that would terminate any part or all of the process.” Like we have something to trade off other than collapse. We have no options other than the status quo for now that is unless you want to start eliminating people. Try stopping the modern industrial system and see how many people start dying. That is not to say we shouldn’t try to prepare for that eventuality anyway. It is coming. We are on the cusp of destructive change. In fact we are in it we just don’t realize it.

  14. Pennsyguy on Fri, 26th Feb 2016 12:25 pm 

    I think that the fracking “miracles” of both oil and gas are more about a short-term financial bubble than long term energy sources. The next bubble may be about unpaid human labor. Be the first on your block to invest!

  15. twocats on Fri, 26th Feb 2016 1:07 pm 

    the G-20 is wrapping up today (i didn’t even realize they were meeting) and if they announce a coordinated response to the global downturn, or hatch some scheme, like Markisha says, print baby print. nature might bat last, but apparently this game has like ten OT periods.

    rock’s got the truth of it, I don’t watch tv, but whenever i catch even a second of financial news, its nothing but salivating, well-capitalized interest circling the energy-wagon.

    the only interesting catch for world leaders: these wolves like wounded game only, so there has to be a fairly significant collapse in asset value before they’d be willing to come in. So will there be more pain? Yes. Is it almost completely intentional? Yes.

  16. rockman on Fri, 26th Feb 2016 1:42 pm 

    Ghung – Unlike you I have complete faith in humanity: it will ALWAYS CHOOSE what it thinks is in its personal best interest. Whether it really is or not. History has proven that time and again. I’ve yet to see a politician or democratic govt veer very far from the majority public opinion. LOL.

  17. Apneaman on Fri, 26th Feb 2016 1:55 pm 

    twocats, OT periods depends on where you live. This El Nino seems to be ending and did not relieve the California/S.W drought as hoped (new rules). They in sudden death overtime. It will never end and it’s just be a matter of time before the mass migration starts.

  18. Davy on Fri, 26th Feb 2016 6:47 pm 

    Chesapeake’s AIG Moment: Energy Giant Faces $1 Billion In Collateral Calls

    “We cannot provide assurance that our credit ratings will not be further reduced if commodity prices continue to remain low. Any further downgrade to our credit ratings could negatively impact our availability and cost of capital.”

    “Some of our counterparties have requested or required us to post collateral as financial assurance of our performance under certain contractual arrangements, such as transportation, gathering, processing and hedging agreements. As of February 24, 2016, we have received requests to post approximately $220 million in collateral, of which we have posted approximately $92 million. We have posted the required collateral, primarily in the form of letters of credit and cash, or are otherwise complying with these contractual requests for collateral. We may be requested or required by other counterparties to post additional collateral in an aggregate amount of approximately $698 million (excluding the supersedeas bond with respect to the 2019 Notes litigation discussed in Note 3 of the notes to our consolidated financial statements included in Item 8 of this report), which may be in the form of additional letters of credit, cash or other acceptable collateral. Any posting of collateral consisting of cash or letters of credit, which would reduce availability under our credit facility, will negatively impact our liquidity.”

  19. Kenz300 on Mon, 29th Feb 2016 8:55 am 

    Climate Change is real…….fossil fuels are poisoning the land, air and water……….

    It is time to move on…………….

    The horse and buggy era did not end because we ran out of horses or buggy’s…… aa better product came along……

    Wind and solar are better energy sources. They are safer, cleaner and cheaper and less destructive to the environment.

    100% electric transportation and 100% solar by 2030

    Exxon’s Climate Change Cover-Up Is ‘Unparalleled Evil,’ Says Activist

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