NEW YORK (AP) -- Shares of Continental Resources surged Monday after it said results from an initial test well in the Three Forks Reservoir of the Bakken shale region could signal increased oil and gas riches.
THE SPARK: The well was drilled to a depth of 21,313 feet in a geological layer of the Three Forks Reservoir in McKenzie County, N.D. It had a flow rate of 953 barrels of oil equivalent per day in the initial one-day test period, according to the company.
"The results are very encouraging and indicate that there may be upside to our estimate of 24 billion barrels of oil equivalent of recoverable reserves in the Bakken field," said Jack Stark, senior vice president of exploration.
Continental, which has been drilling in North Dakota for more than two decades, was one of the first to tap the rich Bakken and underlying Three Forks formations in the state. Both formations lie two miles beneath the surface.
THE ANALYSIS: Jefferies analyst Subash Chandra said the results from the well were lower than those from an earlier well drilled in the area but the new well could catch up "further along the learning curve."
"Overall, although the result may not have 'knocked it out of the ballpark,' we see it as a solid first step to third bench exploration," Chandra wrote.
SHARE ACTION: Shares of Continental Resources rose $3.85, or 5.6 percent, to $72.55 in heavy volume during afternoon trading. In the past 52 weeks, the price has ranged from $61.02 to $97.19 per share.