CONTINENTAL RESRCES (CLR, Financial) filed Quarterly Report for the period ended 2009-06-30.
CONTINENTAL RESOURCES is a crude-oil concentrated independent oil and natural gas exploration and production company with operations in the Rocky Mountain Mid-Continent and Gulf Coast regions of the United States. The Company focuses its operations in large new and developing plays where horizontal drilling advanced fracture stimulation and enhanced recovery technologies provide the means to economically develop and produce oil and natural gas reserves from unconventional formations. CONTINENTAL RESRCES has a market cap of $6.26 billion; its shares were traded at around $36.93 with a P/E ratio of 27.5 and P/S ratio of 6.5.
Oil and Natural Gas Sales. Oil and natural gas sales for the three months ended June 30, 2009 were $146.4 million, a 51% decrease from sales of $297.6 million for the same period in 2008. Our sales volumes increased 471 MBoe or 16% over the same period in 2008 volumes due to the continuing success of our enhanced oil recovery and drilling programs. Our realized price per Boe decreased $59.33 to $43.52 for the three months ended June 30, 2009 from $102.86 for the three months ended June 30, 2008. The differential between NYMEX calendar month average crude oil prices and our realized crude oil price per barrel for the three months ended June 30, 2009 was $6.02 compared to $5.75 for the three months ended June 30, 2008, $8.32 for the first quarter 2009, and $9.50 for the year ended December 31, 2008. Factors contributing to the changing differentials included Canadian oil imports and increases in production in the Rocky Mountain region, coupled with downstream transportation capacity constraints, refinery downtime in the Rocky Mountain region, and seasonal demand fluctuations for gasoline.
In June 2009, we entered into natural gas fixed price swaps for 600,000 MMBtu per month at an average price of $5.80 per MMBtu for December 2009 and $6.30 per MMBtu for calendar year 2010. We also entered into basis swaps for the same volumes and periods to lock in the difference between NYMEX natural gas prices and Inside FERC Centerpoint Energy East Index at an average differential of ($0.53) per MMBtu for December 2009 and ($0.62) for calendar year 2010. These swaps were put in place to underpin our current and expected level of operations in the Arkoma Woodford play in southeastern Oklahoma by securing a predictable cash flow stream on about a third of our natural gas production for the periods covered. We reported non-cash unrealized mark-to-market gains from our gas derivatives of $890,000 for the three months ended June 30, 2009.
for the three months ended June 30, 2009 than the comparable 2008 period. The price decreased $56.01 per barrel which decreased reclaimed oil income by $4.5 million contributing to an overall decrease in oil and gas service operations revenue of $4.7 million for the three months ended June 30, 2009. Associated oil and natural gas service operations expenses decreased $3.8 million to $2.7 million during the three months ended June 30, 2009 from $6.5 million during the three months ended June 30, 2008 due mainly to a decrease in the costs of purchasing and treating oil for resale compared to the same period in 2008. We sold high-pressure air from our Red River units to a third party and recorded revenues of $0.4 million for the three months ended June 30, 2009 compared to $0.8 million for the three months ended June 30, 2008.
Production Expense and Production Tax and Other Expenses. Production expense decreased $3.0 million, or 11%, during the three months ended June 30, 2009 to $24.0 million from $27.0 million during the three months ended June 30, 2008. During the three months ended June 30, 2009, we participated in the completion of 50 gross (14.2 net) wells. Production expense per Boe decreased to $7.14 for the three months ended June 30, 2009 from $9.32 per Boe for the three months ended June 30, 2008 due to a decrease in workover expenses coupled with an increase in sales volumes.
General and Administrative Expense. General and administrative expense decreased $0.9 million to $9.4 million during the three months ended June 30, 2009 from $10.3 million during the comparable period of 2008. General and administrative expense includes non-cash charges for stock-based compensation of $2.7 million and $2.5 million for the three months ended June 30, 2009 and 2008, respectively. General and administrative expense excluding equity compensation decreased $1.1 million for the three months ended June 30, 2009 compared to the three months ended June 30, 2008. The decrease was primarily related to a donation of $1.0 million made in 2008 to Oklahoma State University to support a petroleum engineering program that was not repeated in 2009. On a volumetric basis, general and administrative expense decreased $0.77 to $2.78 per Boe for the three months ended June 30, 2009 compared to $3.55 per Boe for the three months ended June 30, 2008.
Read the The complete ReportCLR is in the portfolios of Richard Aster Jr of Meridian Fund, NWQ Managers of NWQ Investment Management Co, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc, John Keeley of Keeley Fund Management.
CONTINENTAL RESOURCES is a crude-oil concentrated independent oil and natural gas exploration and production company with operations in the Rocky Mountain Mid-Continent and Gulf Coast regions of the United States. The Company focuses its operations in large new and developing plays where horizontal drilling advanced fracture stimulation and enhanced recovery technologies provide the means to economically develop and produce oil and natural gas reserves from unconventional formations. CONTINENTAL RESRCES has a market cap of $6.26 billion; its shares were traded at around $36.93 with a P/E ratio of 27.5 and P/S ratio of 6.5.
Highlight of Business Operations:
For the first six months of 2009, our oil and natural gas production increased to 6,711 MBoe (37,079 Boe per day), up 19% from the first six months of 2008. The increase in 2009 production was primarily driven by an increase in production from our Arkoma Woodford and Bakken fields. Despite this substantial increase in production, our oil and natural gas revenues for the first six months of 2009 decreased by 54% to $239.0 million due to a 60% decrease in commodity prices compared to the same period in 2008. Our realized price per Boe decreased $55.35 to $36.99 for the six months ended June 30, 2009 compared to the six months ended June 30, 2008. While we experienced decreases in production expense and production tax and other expenses of a combined total of $15.6 million, or 19%, due to a decrease in workover expense and a decrease in production taxes as a result of lower commodity prices, respectively, our decrease in combined per unit cost was $4.16 per Boe, or 29%, as a result of a 796 MBoe increase in sales volumes. For the six months ended June 30, 2009, oil sales volumes were 251 MBbls less than oil production due to temporary storage of barrels in response to low prices and pipeline line fill requirements. Oil sales volumes were 35 MBbls more than production for the same period in 2008 due to the sale of crude oil inventory. Our cash flow from operating activities for the six months ended June 30, 2009, was $82.5 million, a decrease of $215.5 million from $298.0 million provided by our operating activities during the comparable 2008 period. The decrease in operating cash flows was primarily due to decreases in commodity prices. During the six months ended June 30, 2009, we invested $227.4 million (excluding payments to reduce accruals of $71.1 million and including seismic costs) in our capital program concentrating mainly in the Red River units, the Bakken field and the Arkoma Woodford play.Oil and Natural Gas Sales. Oil and natural gas sales for the three months ended June 30, 2009 were $146.4 million, a 51% decrease from sales of $297.6 million for the same period in 2008. Our sales volumes increased 471 MBoe or 16% over the same period in 2008 volumes due to the continuing success of our enhanced oil recovery and drilling programs. Our realized price per Boe decreased $59.33 to $43.52 for the three months ended June 30, 2009 from $102.86 for the three months ended June 30, 2008. The differential between NYMEX calendar month average crude oil prices and our realized crude oil price per barrel for the three months ended June 30, 2009 was $6.02 compared to $5.75 for the three months ended June 30, 2008, $8.32 for the first quarter 2009, and $9.50 for the year ended December 31, 2008. Factors contributing to the changing differentials included Canadian oil imports and increases in production in the Rocky Mountain region, coupled with downstream transportation capacity constraints, refinery downtime in the Rocky Mountain region, and seasonal demand fluctuations for gasoline.
In June 2009, we entered into natural gas fixed price swaps for 600,000 MMBtu per month at an average price of $5.80 per MMBtu for December 2009 and $6.30 per MMBtu for calendar year 2010. We also entered into basis swaps for the same volumes and periods to lock in the difference between NYMEX natural gas prices and Inside FERC Centerpoint Energy East Index at an average differential of ($0.53) per MMBtu for December 2009 and ($0.62) for calendar year 2010. These swaps were put in place to underpin our current and expected level of operations in the Arkoma Woodford play in southeastern Oklahoma by securing a predictable cash flow stream on about a third of our natural gas production for the periods covered. We reported non-cash unrealized mark-to-market gains from our gas derivatives of $890,000 for the three months ended June 30, 2009.
for the three months ended June 30, 2009 than the comparable 2008 period. The price decreased $56.01 per barrel which decreased reclaimed oil income by $4.5 million contributing to an overall decrease in oil and gas service operations revenue of $4.7 million for the three months ended June 30, 2009. Associated oil and natural gas service operations expenses decreased $3.8 million to $2.7 million during the three months ended June 30, 2009 from $6.5 million during the three months ended June 30, 2008 due mainly to a decrease in the costs of purchasing and treating oil for resale compared to the same period in 2008. We sold high-pressure air from our Red River units to a third party and recorded revenues of $0.4 million for the three months ended June 30, 2009 compared to $0.8 million for the three months ended June 30, 2008.
Production Expense and Production Tax and Other Expenses. Production expense decreased $3.0 million, or 11%, during the three months ended June 30, 2009 to $24.0 million from $27.0 million during the three months ended June 30, 2008. During the three months ended June 30, 2009, we participated in the completion of 50 gross (14.2 net) wells. Production expense per Boe decreased to $7.14 for the three months ended June 30, 2009 from $9.32 per Boe for the three months ended June 30, 2008 due to a decrease in workover expenses coupled with an increase in sales volumes.
General and Administrative Expense. General and administrative expense decreased $0.9 million to $9.4 million during the three months ended June 30, 2009 from $10.3 million during the comparable period of 2008. General and administrative expense includes non-cash charges for stock-based compensation of $2.7 million and $2.5 million for the three months ended June 30, 2009 and 2008, respectively. General and administrative expense excluding equity compensation decreased $1.1 million for the three months ended June 30, 2009 compared to the three months ended June 30, 2008. The decrease was primarily related to a donation of $1.0 million made in 2008 to Oklahoma State University to support a petroleum engineering program that was not repeated in 2009. On a volumetric basis, general and administrative expense decreased $0.77 to $2.78 per Boe for the three months ended June 30, 2009 compared to $3.55 per Boe for the three months ended June 30, 2008.
Read the The complete ReportCLR is in the portfolios of Richard Aster Jr of Meridian Fund, NWQ Managers of NWQ Investment Management Co, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc, John Keeley of Keeley Fund Management.
