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Commodities

Continental to resume some U.S. shale output but sees sector lackluster unless oil prices rise

(Reuters) - U.S. shale oil producer Continental Resources CLR.N on Tuesday said it plans to resume most curtailed production, adding prices need to rise further for a significant rebound in overall industry activity.

Supply and demand are rebalancing, but current prices near $40 a barrel are not enough for long-term growth in U.S. output, founder and Chairman Harold Hamm said.

The company, which shut 70% of its oil production in the spring when prices and fuel demand collapsed, said U.S. production growth will stay moderate unless oil reaches $50 to $60 a barrel.

Continental said its cost are running about $1,500 per well to resume production, and reopened wells showed double their earlier flow rates.

The company, a major producer in the Bakken shale of North Dakota, said it was confident that a court decision to shut and drain the 570,000 barrel per day Dakota Access Pipeline would be stayed. It would see minimal impact on its production if the oil pipeline were closed, executives said.

Continental directly ships about 35,000 to 50,000 barrels of oil per day on the line, a major transportation artery out of the North Dakota oil fields.

Continental also said 97% of its workforce had returned to their offices and work sites. It was among the first to bring employees back following COVID-19 related office closings.

In a video town hall to employees in late April, CEO William Berry and Chairman Hamm laid out plans for returning staff to work, including free testing for employees and family members.

Shares were down 2.7% on Tuesday afternoon at $17.17.

Reporting by Liz Hampton; editing by Jonathan Oatis and David Gregorio

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