Continental Resources Halts drilling in North Dakota

[Snagglefoot]

Harold Hamm, the head of Continental Resources has announced Continental Resources will stop drilling in North Dakota for the first time in 30 years. Hamm said their break even point is $60 per bbl. Hamm had taken Continental private in 2022.

Oil production in Montana from all companies was 1,128,000 bbls per day in October, and was edging down from the all time high of 1,228,000 reached in 2024. The statistics are lagging by 3 months.

 

[Snagglefoot]

Whoops, I mentioned Montana by accident. It’s North Dakota with those production numbers.

 

[dkryan]

Whoops, I mentioned Montana by accident. It’s North Dakota with those production numbers.

That’s not a surprise.

In a recent WSJ article, frackers in the Permian Basin of Texas were quoted as saying the price of oil would have to be $80 per barrel in order to have consistent positive income and full employment at the well sites.

 

[Mechanician]

The fact the low prices is causing lowered production - while increased production is always touted as the way to lower prices ... is as ironic as referring to it as "Our oil."
Drill baby Drill!

 

[4wd]

That’s a shale based billionaire talking - and not a CEO of a vital global energy company that has a diverse portfolio - along with way more people/countries to please daily …
But let’s complain what Wirth/Woods do …

 

[Snagglefoot]

The neat thing about a privately held company like Continental is you don't have to fool any shareholders. I would say they are like a Canary in a coal mine. Expensive fracking and $60 WTI don't travel together too well.

 

[Snagglefoot]

From Exxon’s 2025 year end, the numbers are big but there are three very import words: Weaker crude realizations. The weaker crude realizations ..were partially offset by advantaged volumes growth in Guyana and the Permian basin. Let me translate that. “What we lose per bbl we’ll make up in volume.” The canary is not looking very healthy.

 

[oil pan 4]

Harold Hamm, the head of Continental Resources has announced Continental Resources will stop drilling in North Dakota for the first time in 30 years. Hamm said their break even point is $60 per bbl. Hamm had taken Continental private in 2022.

Oil production in Montana from all companies was 1,128,000 bbls per day in October, and was edging down from the all time high of 1,228,000 reached in 2024. The statistics are lagging by 3 months.

I heard the same thing about $2 a gallon gas.

 

[Arc]

Would like to see the breakdown of the $60 cost. I never trust what I hear because "cost" can mean more than what the average person thinks the definition is. It is just like "loss" when it includes anything under what the estimated total profit plus actual cost was. Loss to me would mean less than the actual cost of doing business but that is not what it means most of the time.

 

[trd1zz]

CHRD seems to be doing just fine in North Dakota

 

[Snagglefoot]

CHRD seems to be doing just fine in North Dakota

Chord was formed from Oasis, which went into chapter 11 in 2020. They then merged with Whiting and purchased Enerplus and XTO’s assets when those companies were under duress. They currently are operating 5 drilling rigs under the Oasis name and two rigs under the name, XTO. This was a Predator play where an investment company raised a lot of money to buy in low right during Covid. But here is the deal. Although they are drilling hard, it is just to replace the decline rate. Their oil in the ground is from acquisitions. When they were drilling at $60 they weren’t making a dime from that new oil. All their profits came from the low priced acquisitions. Great business plan and I imagine the new oil is honouring their oil delivery contracts in place.

Here is the price of oil over the time of those acquisitions. If you like you can get on Wiki and line up each acquisition with the oil price environment. Mods, I used a screenshot to quickly show the oil price over several years.

 

[trd1zz]

When they were drilling at $60 they weren’t making a dime from that new oil. All their profits came from the low priced acquisitions.

Where are you getting this information?

Especially considering the majority of their wells are likely to be 3 to 4 mile long laterals which the company has confirmed in official disclosures to significantly lower breakeven costs. And their most recent forecast for '26 calls for $700M in free cash flow at $64/bbl with plenty of planned drilling activity. Simply put, this implies new wells are expected to be profitable at that price... otherwise why drill?

 

[Snagglefoot]

Where are you getting this information?

Especially considering the majority of their wells are likely to be 3 to 4 mile long laterals which the company has confirmed in official disclosures to significantly lower breakeven costs. And their most recent forecast for '26 calls for $700M in free cash flow at $64/bbl with plenty of planned drilling activity. Simply put, this implies new wells are expected to be profitable at that price... otherwise why drill?

If they don’t drill their production will go down the toilet and so will their share value. Most of their reserves are from bargain priced acquisitions which keeps them alive. The current price today is fine, but they have plenty of hedges they have to live up to. Ie: delivering oil for $64 per bbl instead of $94. When the hedges expire they can try get spot oil prices for a while and then they can profitably drill for oil. You can check on the Oasis bankruptcy and the mergers and acquisitions on wiki.

 

[trd1zz]

If they don’t drill their production will go down the toilet and so will their share value. Most of their reserves are from bargain priced acquisitions which keeps them alive. The current price today is fine, but they have plenty of hedges the have to live up to. Ie: delivering oil for $64 per bbl instead of $94. When the hedges expire they can try get spot oil prices for a while and then they can profitably drill for oil. You can check on the Oasis bankruptcy and the mergers and acquisitions on wiki.

Still not sure how you can so confidently claim their drilling is not profitable at $64/bbl. Source?

 

[Snagglefoot]

Still not sure how you can so confidently claim their drilling is not profitable at $64/bbl. Source?

Harold Hamm, CEO of Continental Resorces with over 30 years experience in the Williston Basin.
If Harold says it doesn’t work….it doesn’t work.

Mods, I posted a screen shot of Harold Hamm from Wiki so Bittogers would know who he was.

 

[trd1zz]

So... no source then .

They are different companies.

 

[Snagglefoot]

Haha. You are welcome to do your own research on the cost of an oil well with a four mile lateral and a multi frac job and calculate how many $64 bbls of oil you’ll need to pay it out. I’m not trying to bad mouth the company but check out its PE ratio and tell us if there might be a little bit of over-exuberance going on.

 

[Snagglefoot]

This company was simply a shell company 6 years ago when they assembled and borrowed a bunch of money to purchase the assets of Oasis that was bankrupt at the time. That move paid off well and they enjoyed a few years of liquidating the reserves. Their current dividend is around 4% and was achieved by pumping the oil they bought through mergers and acquisitions. They basically mopped up the mess in North Dakota during the last oil price collapse but did have some good years to help pay for it. They are however, 1.5 billion in debt. Here is there share price graph. Mods, I posted a screen shot to demonstrate the quick graph of the share price.

 

[trd1zz]

And they are now the largest owner, operator, and producer in the Williston

 

[Snagglefoot]

And they are now the largest owner, operator, and producer in the Williston

Yes, because they mopped up the mess. If prices stay high they’ll do well. If they “ go back to normal” they are doomed.