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Continental Resources, Inc. Message Board

  • gains102 gains102 Nov 6, 2007 9:45 AM Flag

    Q3 Report

    Continental Resources (NYSE: CLR - News) today reported unaudited third quarter 2007 results, the 2008 capital budget approved by the Company's Board of Directors and 2008 financial and operating guidance. The Company reported net income for the three months ended September 30, 2007, of $56.4 million, or $0.33 per diluted share, on revenues of $156.8 million. The reported net income includes an unrealized loss of $12.5 million (7.8 million net of taxes) recognized for the change in the fair market value of open crude oil derivative contracts not designated for hedge accounting. Net income for the quarter would have been $64.2 million, or $.38 per diluted share without the effect of the unrealized derivative loss.

    Net income for the three months ended September 30, 2006, was $54.5 million, or $0.34 per diluted share, after pro forma adjustments to provide for income taxes as if the Company had been a subchapter C corporation during the 2006 third quarter.

    Management Comments
    "As a result of record high production and revenues, the Company's EBITDAX of $133 million was $24 million higher than last quarter", said Harold Hamm, Chairman and Chief Executive Officer. "Our cash operating margin was $49 per equivalent barrel in the third quarter when NYMEX oil prices averaged $75 per barrel. With higher NYMEX oil prices in the fourth quarter, our cash operating margin should continue to grow."
    "We are excited about our 2008 drilling program", said Mr. Hamm. "The capital budget of $616 million represents a 28% increase over the 2007 budget and will be focused on oil plays in the Williston Basin and the Oklahoma Woodford Shale. We estimate that the drilling program will increase average daily production to approximately 34,000 boepd for 2008, about 16 percent above the 2007 third quarter rate. This estimated daily production rate would be about a 20,000 boepd increase over the 2004 average daily rate of 14,121 boepd, with essentially all of the production growth during that period coming from drilling operations."
    2007 Guidance Update

    As noted in the second quarter earnings press release, delays in completion of the new gas plant at the Red River Units and in pipeline connections in the Woodford Shale area reduced natural gas sales below the low end of the guidance range. Natural gas production for 2007 is now projected to be approximately 12,000 MMcf. In part due to the lower natural gas production, production expense guidance is being increased to an estimated $7.50 per boe for 2007. In connection with the initial public offering, the Company converted to a subchapter C Corporation from a subchapter S Corporation. During the third quarter, the Company determined that earnings would be allocated between the subchapter S and C Corporation periods on a pro-rata basis. As a result, the 2007 effective tax rate is estimated to be approximately 35%.

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