Continental Resources Announces Increase in Proved Reserves Results

Continental Resources, Inc.(NYSE: CLR) increased its year-end 2012 proved reserves to 785 MMBoe (millionbarrels of oil equivalent), a year-over-year gain of 54 percent. With the 2012increase, Continental has grown proved reserves at a compound annual growthrate of 45 percent since year-end 2009.(Logo: http://photos.prnewswire.com/prnh/20120327/DA76602LOGO)Continental's 2012 proved reserves had a net present value discounted at 10percent (PV-10) of $13.3 billion, a 45 percent increase over the PV-10 of $9.2billion for proved reserves at year-end 2011.Proved reserves growth in 2012 primarily reflected strong production growth inthe Bakken play of North Dakota and Montana, which Continental believes is thenation's premier oil play. Continental is the largest producer and leaseholderin the Bakken, with approximately 1.1 million net acres. The Company has alsoaccelerated production growth in its South Central Oklahoma Oil Province(SCOOP), an oil- and liquids-rich play in Oklahoma.Thirty-nine percent of Continental's total 2012 proved reserves, or 309.0MMBoe, were proved developed producing (PDP), compared with 40 percent ofyear-end 2011 proved reserves. Crude oil reserves represented 72 percent of 2012 total proved reserves, asignificant increase over year-end 2011, when crude oil accounted for 64percent of the Company's 508 MMBoe in proved reserves. The higher percentageof crude oil proved reserves in 2012 was accomplished despite two crude-oilconcentrated divestitures.Continental currently operates 85 percent of its total proved reserves,compared with 86 percent at year-end 2011."We continue to increase our concentration in high-value, high-growth, crudeoil assets, especially in the Bakken," said Harold Hamm, Chairman and ChiefExecutive Officer. "We are growing the value of our Bakken assets throughstrategic acquisitions, exploration, and the expanded use of pad drilling,which should improve efficiencies and translate into even better rates ofreturn."Through acquisitions and leasing, Continental increased its Bakken leaseholdby 24 percent in the past year, from 915,863 net acres at year-end 2011 to1,139,799 net acres at year-end 2012.The Company is also leveraging the increased demand for high-quality Bakkencrude oil at U.S. refineries. "We have more than adequate pipe and railcapacity out of the basin at this time, so we can move our production to themost advantageous markets," Mr. Hamm said. "Realizing the Bakken's fullpotential is essential to our five-year plan to triple production and provedreserves by year-end 2017, while increasing operating margins."Strong Production GrowthContinental's 2012 production totaled 35.7 MMBoe, a 58 percent increase overproduction of 22.6 MMBoe for 2011, in line with the Company's productiongrowth guidance for 2012.Estimated fourth quarter 2012 production was 9.8 MMBoe, or 106,831 Boe perday, a 42 percent increase over fourth quarter production for 2011. TheCompany deferred some fourth quarter well completions to stay within itscapital expenditure budget for 2012. Fourth quarter 2012 was the 19^thconsecutive quarter in which Continental has increased production comparedwith the immediately previous quarter.Based on continued production growth, as well as an acquisition and adivestiture announced December 20, 2012, Continental's current production isapproximately 116,000 Boepd.Increased Proved ReservesContinental's 2012 proved reserves in the Bakken totaled 564 MMBoe, almostdouble proved reserves in the play at year-end 2011. The Company's Bakkenproved reserves had a PV-10 of $9.9 billion at year-end 2012.Other significant components of year-end 2012 proved reserves included theSCOOP play in Oklahoma, with proved reserves of 63 MMBoe (PV-10 of $955million) and the Red River Units, where proved reserves increased in the pastyear to 78 MMBoe (PV-10 of $2.0 billion).Exploration and development activity was the primary driver in the Company's2012 proved reserves growth, adding 234 MMBoe of proved reserves in the year,of which 27 percent were PDP and the remainder PUDs (proved undevelopedreserves). In total, a reconciliation of 2012 proved reserves included:•  Exploration/development    234 MMBoe (63 MMBoe PDP, 171 MMBoe PUDs)•  Acquisitions                           82 MMBoe•  Divestitures                           (8) MMBoe•  Performance revisions       50 MMBoe•  De-booking                            (34) MMBoe•  Price revisions                    (11) MMBoe•  2012 production                  (36) MMBoeYear-end 2012 proved reserves included:•  PUD locations                        1,763 gross (982 net)•  Bakken PUDs                    86 percent of total net PUDsAlso notable was the fact that the Company for the first time booked provedreserves in lower benches of the Bakken Three Forks formation, with therecognition of three PDPs and 11 PUDs in 2012. Continental has completed twowells in the Three Forks second bench and one well in the third bench.Traditionally operators in the play targeted the Middle Bakken zone above theThree Forks and only the first bench of the Three Forks zone.