Harold Hamm of Continental Resources says there’s no sense in drilling when there’s no margin to make at $58 oil.
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They can’t stop drilling. They have to drill to hold leases.
Probably not in the Bakken. One well holds a 1280. Most of those first wells were drilled in the past 15 years. Pretty much everything is held, now it’s just a matter of whether or not you want to drill the remaining 7 wells on the units that still just have one well. They have a decent amount of Williams/McKenzie County inventory (drilled 84 wells in last year) but IMO they don’t have lease expiration issues unless maybe on tiny amounts in Montana or far Northern Divide (where you probably don’t care if the lease expires too much as it’s fringe).
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Well they keep saying they will stop drilling when rigs are on 3-year contracts etc. If they stop everyone will leave and then what?
My guess is that they will keep the rigs working, as it’s tough and costly to shut it down and then restart a year or more later. As someone else mentioned, they will continue drilling to hold units—new spacing in many areas is 4 sections, so they can tie up 16 full sections with one pad. (Pad in corner, 4 mile laterals, one in each unit.)
I’ve seen XTO buy out rig contracts to release rigs early and be picking up rigs at the same time. It is hard to shut down. Rigs are aging. Ad valorem taxes. Crews drift away. I guess it would throw the work to North Dakota contractors because everyone else goes home.
As of today, Continental no longer operates a drilling rig in North Dakota.
All that means is everyone go somewhere else.
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