HOUSTON Continental Resources Inc (CLR.N), North Dakota's second-largest oil producer, said on Tuesday it would slash its 2016 capital budget by 66 percent as it tries to preserve cash amid tumbling crude prices.
Led by billionaire wildcatter Harold Hamm, Continental plans to spend $920 million this year, down from $2.7 billion in 2015.
The cut comes just after rival Hess Corp (HES.N) and Noble Energy Inc (NBL.N) slashed their own 2016 budgets, adding to a chorus of company executives chanting that the plunge in oil prices has made it all but impossible to turn a profit.
Oklahoma City-based Continental, for instance, said it would not become profitable until oil prices CLc1 return to $37 per barrel.
U.S. oil prices closed Tuesday at $31.45 per barrel.
Hamm famously canceled Continental's oil hedges in the fall of 2014, a bold bet that now appears misguided as the price of crude has only tumbled since then, dragging down Continental's profitability.
Yet Hamm showed little sign of remorse on Tuesday, betting that oil prices will jump before 2017.
"We are dedicated to preserving the value of our premier assets and building operational efficiencies in preparation for crude oil prices to stabilize and start recovering later this year," Hamm said in a statement.
The company does plan to cut its oil output this year by 10 percent from 2015 levels to roughly 200,000 barrels of oil equivalent per day (boe/d), a recognition that it can no longer afford to extract and sell oil from the more-than 1 million acres it controls at depressed prices.
The largest plurality of Continental's 2016 budget spending will be in North Dakota's Bakken shale, which the company helped make a global oil play.
Oklahoma's SCOOP shale formation will receive the next-largest share of the budget, followed by other Oklahoma fields and well repair projects.
Overall, Continental plans to complete 71 wells this year, a sharp drop from 2015. The company said it will delay bringing online most of its North Dakota wells this year, increasing its count of drilled-but-uncompleted wells from 135 in December to 195 at the end of 2016.
Shares of Continental rose 10.5 percent to close Tuesday trading at $18.84 per share.
(Reporting by Ernest Scheyder; editing by Diane Craft)