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CONTINENTAL RESOURCES ANNOUNCES 2Q22 RESULTS, DECLARES QUARTERLY DIVIDEND, & UPDATES VARIOUS 2022 GUIDANCE METRICS & DIFFERENTIALS

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Cision

OKLAHOMA CITY, July 28, 2022 /PRNewswire/ --

Strong 2Q22 Results
$1.74 B Cash Flow from Operations (CFO) & $1.23 B Free Cash Flow (FCF) (Non-GAAP)
$1.21 B Net Income; $3.35 per Diluted Share ($1.25 B Adj. Net Income; $3.47 per Adj. Share (Non-GAAP))
$265.2 MM Total Debt Reduction and $814.2 MM Net Debt (Non-GAAP) Reduction in 2Q22

Declaring $0.28 per Share Quarterly Dividend (Payable 8/22/22 to Stockholders of Record on 8/8/22)

Updating Various 2022 Guidance Metrics & Differentials
• Increasing Projected Return on Capital Employed (ROCE) to ~32% from Previous ~31%
• Improving 2022 Crude Oil Differentials per Barrel of Oil to Average ($2.25) to ($3.25) from ($2.50) to ($3.50)
• Improving 2022 DD&A per Boe to $12.00 to $14.00 from $14.00 to $16.00
• Updating 2022 Production Expense per Boe to $3.75 to $4.25 from $3.50 to $4.00

Continental Resources, Inc. (NYSE: CLR) (the "Company") today announced its second quarter 2022 operating and financial results, declared a quarterly dividend, and updated various 2022 guidance metrics and differentials.

Logo - https://mma.prnewswire.com/media/95419/continental_resources_logo.jpg

The Company reported net income of $1.21 billion, or $3.35 per diluted share, for the quarter ended June 30, 2022. In second quarter 2022, typically excluded items in aggregate represented $42.8 million, or $0.12 per diluted share, of Continental's reported net income. Adjusted net income for second quarter 2022 was $1.25 billion, or $3.47 per diluted share (non-GAAP). Net cash provided by operating activities for second quarter 2022 was $1.74 billion, and EBITDAX was $2.20 billion (non-GAAP).

Adjusted net income, adjusted net income per share, EBITDAX, free cash flow, net debt, net sales prices, and cash general and administrative (G&A) expenses per barrel of oil equivalent (Boe) presented herein are non-GAAP financial measures. Definitions and explanations for how these measures relate to the most directly comparable U.S. generally accepted accounting principles (GAAP) financial measures are provided at the conclusion of this press release.

2Q22 Production Update

Second quarter 2022 total production averaged 400.2 MBoepd. Second quarter 2022 oil production averaged 198.3 MBopd. Second quarter 2022 natural gas production averaged 1,211 MMcfpd. The following table provides the Company's average daily production by region for the periods presented:












2Q


2Q


YTD


YTD

Boe per day


2022


2021


2022


2021

Bakken


162,840


174,637


167,097


167,646

Anadarko Basin


160,583


151,813


152,319


145,137

Powder River Basin


27,211


6,002


19,475


4,243

Permian Basin


43,527



41,896


All other


6,007


6,247


6,275


6,379

Total


400,168


338,699


387,062


323,405

2Q22 Financial Update







2Q 2022 Financial Update

Three Months Ended
June 30, 2022


Six Months Ended
June 30, 2022


Cash and Cash Equivalents



$553.3 million


Total Debt



$6.30 billion


Net Debt (non-GAAP)(1)



$5.75 billion


Average Net Sales Price (non-GAAP)(1)





Per Barrel of Oil

$106.41


$98.70


Per Mcf of Gas

$7.75


$7.09


Per Boe

$76.02


$70.96


Production Expense per Boe

$4.23


$4.16


Total G&A Expenses per Boe

$1.73


$1.97


Crude Oil Net Sales Price Discount to NYMEX ($/Bbl)

($2.30)


($2.88)


Natural Gas Net Sales Price Premium to NYMEX ($/Mcf)

$0.52


$0.95


Non-Acquisition Capital Expenditures attributable to CLR

$648.5 million


$1.17 billion


Exploration & Development Drilling & Completion

$504.7 million


$930.9 million


Leasehold and minerals

$31.6 million


$56.4 million


Workovers, Recompletions and Other

$112.2 million


$185.1 million


Minerals attributable to FNV

$1.8 million


$3.7 million




(1) Net debt and net sales prices represent non-GAAP financial measures. Further information about these non-
GAAP financial measures as well as reconciliations to the most directly comparable U.S. GAAP financial measures
are provided subsequently under the header Non-GAAP Financial Measures.

Declaring $0.28 per Share Quarterly Dividend

The Company today announced that its Board of Directors has declared a quarterly dividend of $0.28 per share on the Company's outstanding common stock, payable on August 22, 2022 to stockholders of record on August 8, 2022. This equates to an approximately 1.7% dividend yield1.

Updating Various 2022 Guidance Metrics & Differentials

The Company is updating various 2022 guidance metrics and differentials. The Company's projected 2022 return on capital employed is increasing to approximately 32% from approximately 31%. The Company is improving its 2022 DD&A per Boe to $12.00 to $14.00 from $14.00 to $16.00, reflecting strong well productivity, capital efficiency and an upward revision in proved reserves due in part to higher commodity prices. The Company is improving its 2022 crude oil differentials guidance per barrel of oil to average ($2.25) to ($3.25) from ($2.50) to ($3.50), given strong pricing realizations. Finally, the Company is updating its 2022 production expense per Boe to $3.75 to $4.25 from $3.50 to $4.00, given increased workover activity and inflationary pressure.

The Company's full 2022 guidance can be found at the conclusion of this press release.












1 Annualized dividend yield is calculated as the annual dividend per share, based on the July 2022 dividend, divided by the stock
price per share as of July 26, 2022. All future dividends require Board approval.












Three months ended June 30,


Six months ended June 30,



2022


2021


2022


2021

Average daily production:









Crude oil (Bbl per day)


198,313


166,765


196,550


159,350

Natural gas (Mcf per day)


1,211,125


1,031,603


1,143,068


984,334

Crude oil equivalents (Boe per day)


400,168


338,699


387,062


323,405

Average net sales prices (non-GAAP), excluding effect from derivatives: (1)





Crude oil ($/Bbl)


$106.41


$62.37


$98.70


$57.95

Natural gas ($/Mcf)


$7.75


$3.06


$7.09


$4.24

Crude oil equivalents ($/Boe)


$76.02


$39.99


$70.96


$41.47

Production expenses ($/Boe)


$4.23


$3.14


$4.16


$3.24

Production taxes (% of net crude oil and natural gas sales)


7.4 %


7.7 %


7.3 %


7.3 %

DD&A ($/Boe)


$12.33


$15.33


$12.98


$16.76

Total general and administrative expenses ($/Boe) (2)


$1.73


$1.81


$1.97


$1.85

Net income attributable to Continental Resources (in thousands)


$1,208,747


$289,325


$1,806,504


$548,967

Diluted net income per share attributable to Continental Resources


$3.35


$0.79


$4.99


$1.51

Adjusted net income (non-GAAP) (in thousands) (1)


$1,251,543


$332,766


$2,211,534


$611,657

Adjusted diluted net income per share (non-GAAP) (1)


$3.47


$0.91


$6.11


$1.68

Net cash provided by operating activities (in thousands)


$1,737,656


$672,858


$3,242,274


$1,713,118

EBITDAX (non-GAAP) (in thousands) (1)


$2,200,063


$990,938


$4,044,301


$1,953,574










(1) Net sales prices, adjusted net income, adjusted diluted net income per share, and EBITDAX represent non-GAAP financial measures.
Further information about these non-GAAP financial measures as well as reconciliations to the most directly comparable U.S. GAAP
financial measures are provided subsequently under the header Non-GAAP Financial Measures.










(2) Total general and administrative expense is comprised of cash general and administrative expense and non-cash equity compensation
expense. Cash general and administrative expense per Boe was $1.32, $1.37, $1.34, and $1.33 for 2Q 2022, 2Q 2021, YTD 2022, and
YTD 2021, respectively. Non-cash equity compensation expense per Boe was $0.41, $0.44, $0.63, and $0.52 for 2Q 2022, 2Q 2021, YTD
2022, and YTD 2021, respectively.

2Q22 Earnings Summary Presentation

The Company plans to publish a second quarter 2022 summary presentation to its website at www.CLR.com on Thursday, July 28, 2022. The Company does not intend to host a conference call in connection with its second quarter 2022 results.

Previously Announced Offer to Acquire Outstanding Shares for Cash

As previously announced on June 14, 2022, the Company received a non-binding proposal from Harold G. Hamm, on behalf of himself, the Harold G. Hamm Trust and certain trusts established for the benefit of Mr. Hamm's family members (collectively, the "Hamm Family"), to acquire for cash all of the outstanding shares of common stock (the "Common Stock") of the Company, other than shares of Common Stock owned by the Hamm Family and shares of Common Stock underlying unvested equity awards issued under the Company's long-term incentive plans, at a price of $70.00 per share. The Company's board of directors has formed a special committee of independent directors (the "Special Committee") to evaluate and consider the Hamm Family's proposal. The Special Committee has hired independent legal and financial advisors, and the Special Committee's evaluation is ongoing.

The Company cautions its shareholders and others considering trading in its securities that the Hamm Family's proposal constitutes only an indication of interest and does not constitute a binding commitment with respect to a proposed transaction. Moreover, no assurance can be given that such proposal will result in a transaction occurring or its timing or ultimate terms.

About Continental Resources

Continental Resources (NYSE: CLR) is a top 10 independent oil producer in the U.S. and a leader in America's energy renaissance. Based in Oklahoma City, Continental is the largest leaseholder and the largest producer in the nation's premier oil field, the Bakken play of North Dakota and Montana. The Company is also the largest producer in the Anadarko Basin of Oklahoma and has newly acquired positions in the Powder River Basin of Wyoming and Permian Basin of Texas. With a focus on the exploration and production of oil, Continental has unlocked the technology and resources vital to American energy independence and our nation's leadership in the new world oil market. In 2022, the Company will celebrate 55 years of operations. For more information, please visit www.CLR.com.

Cautionary Statement for the Purpose of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995

This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements included in this press release other than statements of historical fact, including, but not limited to, forecasts or expectations regarding the Company's business and statements or information concerning the Company's future operations, performance, financial condition, production and reserves, schedules, plans, timing of development, rates of return, budgets, costs, business strategy, objectives, and cash flows are forward-looking statements. When used in this press release, the words "could," "may," "believe," "anticipate," "intend," "estimate," "expect," "project," "budget," "target," "plan," "continue," "potential," "guidance," "strategy," and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.

Forward-looking statements are based on the Company's current expectations and assumptions about future events and currently available information as to the outcome and timing of future events. Although the Company believes these assumptions and expectations are reasonable, they are inherently subject to numerous business, economic, competitive, regulatory and other risks and uncertainties, most of which are difficult to predict and many of which are beyond the Company's control. No assurance can be given that such expectations will be correct or achieved or that the assumptions are accurate. The risks and uncertainties include, but are not limited to, commodity price volatility; the geographic concentration of our operations; financial market and economic volatility; the effects of any national or international health crisis; the inability to access needed capital; the risks and potential liabilities inherent in crude oil and natural gas drilling and production and the availability of insurance to cover any losses resulting therefrom; difficulties in estimating proved reserves and other reserves-based measures; declines in the values of our crude oil and natural gas properties resulting in impairment charges; our ability to replace proved reserves and sustain production; our ability to pay future dividends or complete share repurchases; the availability or cost of equipment and oilfield services; leasehold terms expiring on undeveloped acreage before production can be established; our ability to project future production, achieve targeted results in drilling and well operations and predict the amount and timing of development expenditures; the availability and cost of transportation, processing and refining facilities; legislative and regulatory changes adversely affecting our industry and our business, including initiatives related to hydraulic fracturing and greenhouse gas emissions; increased market and industry competition, including from alternative fuels and other energy sources; and the other risks described under Part I, Item 1A. Risk Factors and elsewhere in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, registration statements and other reports filed from time to time with the SEC, and other announcements the Company makes from time to time.

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which such statement is made. Should one or more of the risks or uncertainties described in this press release occur, or should underlying assumptions prove incorrect, the Company's actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. Except as otherwise required by applicable law, the Company undertakes no obligation to publicly correct or update any forward-looking statement whether as a result of new information, future events or circumstances after the date of this report, or otherwise.

Readers are cautioned that initial production rates are subject to decline over time and should not be regarded as reflective of sustained production levels. Production from horizontal drilling in shale oil and natural gas resource plays and tight natural gas plays that are stimulated with extensive pressure fracturing are typically characterized by significant early declines in production rates.

We use the term "EUR" or "estimated ultimate recovery" to describe our best estimate of recoverable oil and natural gas hydrocarbon quantities. Actual reserves recovered may differ from estimated quantities. EUR data included herein, if any, remain subject to change as more well data is analyzed.

Investor Contact:

Media Contact:

Rory Sabino

Kristin Thomas

Vice President, Investor Relations

Senior Vice President, Public Relations

405-234-9620

405-234-9480

Rory.Sabino@CLR.com

Kristin.Thomas@CLR.com



Lucy Spaay


Investor Relations Analyst


405-774-5878


Lucy.Spaay@CLR.com


Continental Resources, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations










Three months ended June 30,


Six months ended June 30,


2022


2021


2022


2021

Revenues:

In thousands, except per share data

Crude oil, natural gas, and natural gas liquids sales

$2,829,173


$1,282,914


$5,103,434


$2,530,447

Loss on derivative instruments, net

(195,744)


(62,178)


(671,682)


(105,685)

Crude oil and natural gas service operations

17,045


14,389


34,960


26,178

Total revenues

2,650,474


1,235,125


4,466,712


2,450,940









Operating costs and expenses:








Production expenses

153,238


96,504


290,518


189,569

Production and ad valorem taxes

204,246


94,293


362,611


178,269

Transportation, gathering, processing, and compression

76,352


52,445


151,201


102,701

Exploration expenses

4,634


2,291


17,651


6,936

Crude oil and natural gas service operations

10,444


5,663


19,005


10,153

Depreciation, depletion, amortization and accretion

446,633


471,858


905,662


981,466

Property impairments

15,826


11,610


40,074


23,046

General and administrative expenses

62,574


55,553


137,411


108,401

Net (gain) loss on sale of assets and other

10


(260)


(155)


(467)

Total operating costs and expenses

973,957


789,957


1,923,978


1,600,074

Income from operations

1,676,517


445,168


2,542,734


850,866

Other income (expense):








Interest expense

(72,236)


(60,951)


(144,791)


(125,902)

Gain (loss) on extinguishment of debt

(403)


(94)


(403)


(290)

Other

1,240


298


13


550


(71,399)


(60,747)


(145,181)


(125,642)

Income before income taxes

1,605,118


384,421


2,397,553


725,224

Provision for income taxes

(389,271)


(94,947)


(580,355)


(175,475)

Income before equity in net loss of affiliate

1,215,847


289,474


1,817,198


549,749

Equity in net loss of affiliate

(76)



(76)


Net income

1,215,771


289,474


1,817,122


549,749

Net income attributable to noncontrolling interests

7,024


149


10,618


782

Net income attributable to Continental Resources

$1,208,747


$289,325


$1,806,504


$548,967









Net income per share attributable to Continental Resources:








Basic

$3.38


$0.80


$5.05


$1.52

Diluted

$3.35


$0.79


$4.99


$1.51

Continental Resources, Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets






In thousands


June 30, 2022


December 31, 2021

Assets





Cash and cash equivalents


$553,260


$20,868

Other current assets


2,383,766


1,543,522

Net property and equipment (1)


17,881,055


16,975,465

Other noncurrent assets


110,991


51,256

Total assets


$20,929,072


$18,591,111






Liabilities and equity





Current liabilities (2)


$2,969,603


$1,500,127

Long-term debt, net of current portion (2)


5,662,567


6,826,566

Other noncurrent liabilities


2,911,078


2,408,093

Equity attributable to Continental Resources


9,007,927


7,475,456

Equity attributable to noncontrolling interests


377,897


380,869

Total liabilities and equity


$20,929,072


$18,591,111






(1) Balance is net of accumulated depreciation, depletion and amortization of $17.38 billion and $16.48 billion as of
June 30, 2022 and December 31, 2021, respectively.


(2) The Company's $636 million of outstanding 2023 Notes are scheduled to mature in April 2023 and, accordingly,
are included in the caption "Current liabilities" at June 30, 2022. The Company's total debt, including the current
portion, amounts to $6.30 billion at June 30, 2022.

Continental Resources, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows












Three months ended June 30,


Six months ended June 30,

In thousands


2022


2021


2022


2021

Net income


$1,215,771


$289,474


$1,817,122


$549,749

Adjustments to reconcile net income to net cash provided by operating activities:









Non-cash expenses


671,282


640,370


1,748,373


1,274,311

Changes in assets and liabilities


(149,397)


(256,986)


(323,221)


(110,942)

Net cash provided by operating activities


1,737,656


672,858


3,242,274


1,713,118

Net cash used in investing activities


(807,365)


(343,130)


(1,848,359)


(771,214)

Net cash used in financing activities


(381,275)


(275,747)


(861,523)


(839,336)

Net change in cash and cash equivalents


549,016


53,981