August 6, 2019 / 4:43 PM / 3 months ago

Continental Resources to drop seven rigs in Oklahoma citing efficiency gains

FILE PHOTO: Storage tanks stand on a Continental Resources oil production site near Williston, North Dakota January 23, 2015. REUTERS/Andrew Cullen

(Reuters) - Independent shale producer Continental Resources on Tuesday said it will decrease the number of rigs it operates in Oklahoma to 12 from 19 this year, citing improved productivity.

“The key thing here is it emphasizes the efficiency gains we’ve received from our rigs,” Continental President Jack Stark said during an earnings call with investors. The company has not reduced the number of wells it plans to drill, he said.

U.S. shale production has climbed to record levels, even as oil companies are running fewer rigs. That growing output, along with worries about slowing global demand from the U.S.-China trade dispute, has knocked oil prices lower and prompted some companies to reduce drilling during the second half of the year.

The number of active U.S. rigs has fallen by 102 to 942 in the past year, according to General Electric Co’s Baker Hughes. But shale production in July hit 8.52 million barrels per day, a year-over-year increase of about 16%, according to government data.

There are “probably 100 rigs more in the U.S. than is needed today,” Continental Chief Executive Harold Hamm said on the earnings call.

The Oklahoma City-based company said it would continue to run six rigs in the Bakken shale play in North Dakota, where it is the top producer.

Reporting by Liz Hampton and Debroop Roy; editing by Jonathan Oatis

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