Continental (NYSE:CLR) May Triple Production by 2014

At their analyst day Continental Resources (NYSE:CLR) said they have a target of increasing production by three times what they are now, along with their reserves.

One concern by those attending was the capital expenditure needed to generate that type of growth.

Attending the function, Ticonderoga Securities said, "The two keys to the puzzle for CLR are the Bakken, where it has 865,000 net acres and 540MM boe of net unrisked reserve potential, and the Anadarko Woodford, where CLR boasts 252,000 net acres and 1.5B boe of net unrisked reserve potential. Additionally, there is another 228MM boe of net unrisked reserve potential in the Arkoma Woodford and the Niobrara.

"If there has been disappointment at the meeting, it stems from investors
expecting that the growth would not come at so steep a cost. We were modeling capex within cash flow for 2011 (approximately $1B), but CLR is now guiding toward $1.36B (91% earmarked for drilling, and 92% of the drilling is earmarked for the Bakken and the Woodford)."

Ticonderoga said they maintain a "Neutral" on CLR.

Barclays (NYSE:BCS) Affilate Acquires Future Production from Chesapeake (NYSE:CHK)

Chesapeake Energy Corp. has sold some of the future production at its wells in the North Texas Barnett Shale field to a Barclays (NYSE:BCS) affiliate for $1.15 billion.

The natural gas producer said they're going to use the capital to shrink borrowing on a revolving credit facility, but ratings agencies in many cases consider volumetric production payment (VPP) deals as a form of debt as well.

About 8 percent of production for 2011 and 3 percent of year-end 2010 reserves are included in the deal by Chesapeake.

Included with the five-year deal will be close to 280 million cubic feet of daily production and 390 billion cubic feet of proven reserves in 2011.

Ticonderoga Securities analyst Daniel Pratt said this could lead to an underperformance of Chesapeake shares.