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Continental says oil production, reserves spiked in 2014

[NEW YORK] Continental Resources Inc, the second largest North Dakota oil producer, said on Tuesday its production and reserves jumped last year as it ratcheted up activities in an Oklahoma shale formation.

The reserves increase was less than some on Wall Street expected, a reflection of the company's immense size as it moves from being an upstart operation that seven years ago helped develop North Dakota's vast Bakken oil formation into a steady producer.

Like many of its peers, Continental has struggled in recent months to cope with plunging crude oil prices amidst global oversupply and slack demand.

While Continental has slashed 2015 spending plans twice, it took the unique tack of cutting all of its oil hedges last fall. Chief Executive Officer Harold Hamm said the company made the move, confident that prices would rebound quickly.

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In a speech last week to an oil conference in Houston, Hamm predicted the oil market could rebalance by June.

Continental produced 63.6 million barrels of oil equivalent in 2014, a 28 per cent jump from 2013 levels. Despite the recent oil price drop, the company reached a daily production milestone of 200,000 barrels of oil equivalent in late December.

Crude oil accounted for roughly 70 per cent of production, with natural gas and natural gas liquids making up the rest. The oil per centage was higher than some analysts expected, a positive given that natural gas prices have dropped even more than crude prices.

Continental's total reserves - effectively a guide for growth potential - increased 20 per cent last year to 1.35 billion barrels of oil equivalent.

The company has long been one of the biggest producers in North Dakota's Bakken shale formation, considered one of the world's largest contiguous oil reserves. But the company has much of the play mapped out, and the new reserve additions are coming mostly in Oklahoma's SCOOP shale formation.

Hamm on Tuesday called the parts of SCOOP in which Continental operates "one of the best new plays in North America." Oklahoma City-based Continental plans to report quarterly results on Feb 24. The company's stock rose 2.2 per cent to $47.64.