Shale drillers halt Bakken fracking as Saudis send gloomy note

Oil rig

One day after Saudi Arabia’s oil minister said it was time for high-cost producers to call it quits, two Bakken shale drillers announced they’re doing just that.

Continental Resources Inc., the shale oil pioneer controlled by billionaire wildcatter Harold Hamm, halted all fracking in the Bakken shale formation in the U.S. Williston Basin after posting its first annual loss since the company’s public debut in 2007. Whiting Petroleum Corp. estimates it will leave 73 uncompleted wells in the region by year-end, and another 95 in the Niobrara shale area in the Denver-Julesburg Basin.

Hamm, owner of 76 percent of Continental’s common stock, has responded to plummeting crude prices by slashing his drilling budget and shutting down rigs in the Bakken, where the company is one of the dominant explorers. After spending $1.27 billion on acquisitions to expand its footprint in the region since late 2011, Continental is now seeking to raise cash by attracting investments from joint-venture partners in an Oklahoma discovery known as the Stack.

“For 2016, we will remain patient and disciplined in our activities while striving to enhance shareholder value through continued improvements in our core plays,” Hamm said in an earnings statement Wednesday.

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Continental said it has no fracking crews currently working in the Bakken. The company continues to drill there, focusing on areas with the highest returns, but will leave most wells unfinished this year.

The company’s fourth-quarter production was 224,936 barrels of oil equivalent a day, down from 228,278 in the third quarter. The averaged realized price for its crude was $34.23 a barrel.

Continental’s full-year 2015 net loss was $353.7 million, or 96 cents a share, compared with a profit of $977 million, or $2.64, a year earlier, the Oklahoma City-based producer said. For the fourth-quarter, the company reported a net loss of $139.7 million, or 38 cents a share. Adjusted for one-time items, the per-share loss beat by 2 cents the 21-cent average estimated loss of 30 analysts in a Bloomberg survey.

The statement was released after the close of regular U.S. equity trading. Continental has fallen about 22 percent so far this year.