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Shale unable to absorb price decline: Continental

  • : Crude oil, Natural gas
  • 25/05/14

Shale output growth plans are being sidelined for the time being as this year's decline in oil prices curtails investment into the sector, according to the chief executive officer of Continental Resources.

"There's nothing that we can use in the industry to absorb a $10/bl drop in price from a technology standpoint," chief executive officer Doug Lawler said at the Super DUG Conference & Expo 2025 in Fort Worth, Texas, today. "There are not capital efficiencies that can be captured that makes up $10/bl."

The pullback in capital that is starting to be seen across the industry as a result of the price rout caused by uncertainty around President Donald Trump's tariffs and surging Opec+ supply will continue as the year progresses, Lawler said.

Top shale company executives have warned in recent weeks that shale is in for a rough ride given the price drop, which has since stabilized following a US-China trade truce agreed last weekend. US onshore crude production has likely peaked, according to leading independent Diamondback Energy, while Occidental Petroleum chief executive Vicki Hollub warned the peak could come sooner than expected.

"I would maybe caveat it just a little bit different, and not call it a peak, necessarily, but I think we're in for a period of a plateau," Lawler said today.

Earlier this year, Continental announced a joint venture with Turkey's national oil company and US-based TransAtlantic Petroleum to develop oil and gas resources in southeast and northwest Turkey.

"We don't see it necessarily as an international strategy," Lawler said. "We really see it more as a continuation of the history and heritage of the company, of being exploration-focused."

It also should not be viewed as the company seeing a lack of domestic opportunities, given 5-10pc of its overall annual capital budget will be directed at exploration over the next few years.

Continental, which was founded by shale billionaire and leading Trump donor Harold Hamm in 1967, is the largest leaseholder and producer in the Bakken basin. It also has positions in the Scoop and Stack plays of the Anadarko basin of Oklahoma, and is also active in the Powder River Basin of Wyoming and Permian basin of Texas.


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