HOUSTON (Reuters) - Shale oil producer Continental Resources on Tuesday raised its 2018 production outlook, citing improved performance in North Dakota and operational efficiencies, as well as increased drilling activity in Oklahoma.
The gains come as U.S. oil prices have climbed to near $70 a barrel, spurring a jump in output from shale producers hard hit by the 2014 downturn in prices.
Continental bumped the lower end of its 2018 annual production view by 5,000 barrels of oil equivalent per day (boe/d) to between 290,000 boe/d and 300,000 boe/d. It increased its annual exit rate guidance by 10,000 boe/d to up to 325,000 boe/d.
Overall production for its second quarter rose roughly 25 percent from last year to 284,059 boe/d.
Continental also increased its expected 2018 capital expenditures by $400 million to $2.7 billion, of which about $275 million is associated with a mineral rights deal Continental disclosed earlier this week with Franco-Nevada Corp.
The company also will allocate $200 million to increased drilling and completions activity, adding three rigs by the end of the year. A third of that spending will be focused on the Bakken shale, with the remainder dedicated to Oklahoma.
In the North Dakota Bakken, production climbed by 35 percent from the prior year to 151,805 boe/d during the latest quarter, accounting for more than half of Continental’s total production. The company expects to add one rig in the Bakken by the year’s end, bringing its total there to seven.
In one Oklahoma oil formation, quarterly production jumped by more than 60 percent from the prior year to 51,722 boe/d, the company said.
Shares of Continental were roughly flat in after-market trading at $62.25.
The company posted revenues of $1.14 billion for the quarter, up from $661.5 million a year ago, and in line with analysts’ consensus forecasts, according to Thomson Reuters I/B/E/S.
Net income for the second quarter was $242.5 million, or 65 cents per share, versus a loss of $62.6 million last year.
Excluding one-time items, Continental earned $272.9 million, or 73 cents per share during the quarter, up from a loss of $1.8 million in the same period a year ago. Analysts had forecast earnings of 71 cents per adjusted share during the quarter.
The company will host a quarterly earnings call on Wednesday.
Reporting by Liz Hampton; Editing by Rosalba O'Brien and Chris Reese