Continental Resources, Inc. (CLR), Oasis Petroleum Inc. (OAS), Kodiak Oil & Gas Corp (USA) (KOG): Key Developments Could Propel these Oil Companies Higher

The other two
Oasis Petroleum Inc. (NYSE:OAS) and Continental Resources, Inc. (NYSE:CLR) are also working on boosting output, with Oasis planning on completing more wells this quarter than last. Oasis has only spent 42% of its $1 billion capex budget, so the second half of the year is when management really wants to ramp up drilling, complete more wells and push up oil production.

Oasis Petroleum Inc. (NYSE:OAS) plans on finishing 40-45 gross wells next quarter and has guided for production levels to rise 31,500-34,500 boepd due to more wells coming online. This would be a production boost of 4.4% to 13.4% quarter over quarter. In the long term, Oasis will be able to stretch its capex budget further due to cheaper well completion costs. This will allow more wells to be completed in 2014 over 2013 and is a bullish sign.

Continental Resources, Inc. (NYSE:CLR) currently has 20 rigs running and has completed 138 wells in first half of the year. Continental guided for 245 wells to be completed in total of 2013, so one could expect between 50 and 60 wells will be completed next quarter.

This doesn’t mean Continental Resources, Inc. (NYSE:CLR) is backing away from the Bakken, it is just that in order to drill you need the right weather conditions and the winter makes it significantly harder to drill. Continental is planning on more completions in the first half of 2014, which will be significantly helped by its backlog which stands at 75 wells right now . Continental’s management has been heavily leaning on Bakken production – which is up 65% this year – to reach its goal of 38-40% annual production growth.

Final Thoughts
It’s hard to go against rising margins and rising revenue streams and is why you should bet on domestic oil production. All three of these players have reduced the costs to drill while boosting output at the same time. This kind of innovation can’t be ignored and provides a great investing thesis for each of these oil and gas producers.

The article Key Developments Could Propel these Oil Companies Higher originally appeared on Fool.com and is written by Callum Turcan.

Callum Turcan owns shares of Kodiak and Oasis. The Motley Fool has no position in any of the stocks mentioned.

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