Continental Resources Inc (CLR.N), which produced the most oil and natural gas in North Dakota's Bakken shale fields during the second quarter, expects 2014 production across its vast portfolio to rise at least 26 percent.
The bullish outlook, announced on Tuesday, is part of the company's five-year plan to triple oil production at its more than 1.1 million acres of leases in North Dakota, as well as Oklahoma's Woodford and Colorado's Niobrara shales.
Continental expects to spend $4.05 billion to reach the goal in 2014, up from $3.6 billion this year. The Oklahoma City-based company plans to spend the bulk of that budget in the Bakken, where it helped spark oilfield development seven years ago and remains the largest leaseholder.
"Achieving our 2014 goals will be an excellent year two in our five-year plan to triple production and proved reserves," Harold Hamm, Continental's chief executive and largest shareholder, said in a statement.
Shares of Continental closed 4.2 percent higher at $103.53.
Production likely will increase 26 to 32 percent, with average daily production rising to a range of 170,000 to 180,000 barrels of oil equivalent per day (boe/d), the company said.
Continental hopes to be producing 200,000 boe/d by the end of 2014, up from a goal of 150,000 boe/d by the end of this year. The company produced 135,700 boe/d in the second quarter of 2013.
Roughly 70 percent of production should be oil, a strategy many shale drillers are mimicking as prices for natural gas sit near 10-year lows.
The company plans to complete 400 new wells next year, most of which will be in the Bakken and Oklahoma reserves.
Continental expects to continue to ship about 70 percent of its Bakken oil via rail, executives said on a conference call with analysts.
Standard & Poor's upgraded Continental's bonds to investment grade last month. The company has $4.44 billion in debt, roughly a quarter of its market value.
(Reporting by Ernest Scheyder; Editing by Bernard Orr, Kenneth Barry and Leslie Adler)