Continental Resources sees higher 2021 output as oil recovery heats up

U.S. shale producer Continental Resources Inc raised its capital budget and forecast a rise in its crude oil and natural gas output this year, building on a recent recovery in commodity prices from pandemic-led historic lows.

Crude prices have rallied to their highest level in almost a year, sparking optimism among shale producers after a slump in fuel demand. A harsh winter weather gripping some U.S. states has also raised natural gas demand and prices to record levels.

The company, a major producer in the Bakken shale of North Dakota, said it now expects capital expenditures of $1.4 billion in 2021, up from a previous forecast of between $1.2 billion and $1.3 billion.

It expects annual oil production of between 160,000 barrels per day (bpd) and 165,000 bpd this year, compared with 2020 production of 160,505 barrels per day.

Higher spending in the fourth quarter also pushed the company to an adjusted loss of 23 cents per share, much bigger than analysts’ average estimate of 8 cents per share, according to Refinitiv IBES data.

Continental also said it acquired 130,000 net acres and about 9,000 barrels of oil equivalent per day of production in the Powder River Basin for $215 million, adding more oil weighted assets to its portfolio.

Separately, rival Devon Energy Corp, which completed a merger with WPX Energy last month, also set a higher budget for 2021 and raised its previous production forecast due to better efficiency at its wells in the Delaware Basin.