3Q14 earnings rise for Continental Resources
Continental Resources: An important overview (Part 4 of 14)
Continental Resources’ revenues and profits
In the previous section of this series, we discussed Continental Resources, Inc.’s (CLR) assets and reserves. In this article, we’ll analyze how the company performed in the latest quarter.
Continental Resources released its 3Q14 financial results on November 5, 2014. Other energy upstream companies that have recently released 3Q14 results include Chesapeake Energy (CHK), Anadarko Petroleum (APC), SandRidge Energy (SD), and Newfield Exploration Co. (NFX). All these are components of the Energy Select Sector Standard & Poors depositary receipt (or SPDR) exchange-traded fund (or ETF) (XLE). Here’s an account of Continental Resources’ recent performance.
Quarterly revenues
Continental Resources (CLR) recorded $1,138.46 million in total revenues from crude oil and natural gas sales for 3Q14, which is 16% higher than $981.17 million recorded in 3Q13. Despite lower total average price realization, higher volume led to the increase in the latest quarter.
Production for 3Q14 increased 29% over 3Q13 to an average of 182.33 thousand barrels of oil equivalent (or boe) per day. The production includes 70% oil and 30% natural gas.
Despite the crude oil price fall, Continental Resources’ revenues increased. This was primarily due to higher production and higher natural gas prices.
Production rises
From 3Q13 to 3Q14, Continental Resources’ total production increased 29% to 183.2 thousand barrels of oil equivalent per day. Production increased the most in the company’s Southern US operations, which increased 43%. Production in the North region, which includes the Bakken Shale, increased 24% from 3Q13 to 3Q14.
EBITDAX rises
Continental Resources’ earnings before interest, taxes, depreciation, amortization, and exploration expenses (or EBITDAX) increased 19% from $797.57 million in 3Q13 to $947.63 million in 3Q14. EBITDAX includes earnings before interest expense, income taxes, depreciation, amortization, property impairments, exploration expenses, noncash gains, and losses from derivatives. EBITDAX is a measure of operating profit.
EBITDAX margin (or EBITDAX as percentage of revenues) also improved to 83% in 3Q14 over 81% in the year-ago quarter. Although production expenses increased in 3Q14, profit level was positively affected by lower general and administrative expenses and noncash equity compensation expenses compared to the same quarter in 2013. Read the following section to know how these helped improve Continental Resources’ (CLR) net income.
Browse this series on Market Realist:
