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|Continental Resources Reports First Quarter 2007 Results|
ENID, Okla., May 29 /PRNewswire-FirstCall/ -- Continental Resources (NYSE: CLR) today reported unaudited first quarter 2007 results. For the three months ended March 31, 2007, net income was $53.8 million, or $0.34 per diluted share (pro forma for the 11 for 1 stock split in connection with the initial public offering in May 2007) on revenues of $121.1 million. This compares to net income of $50.3 million, or $0.32 per diluted split-adjusted share, on revenues of $103.8 million for the three months ended March 31, 2006.
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The following table contains unaudited financial and operational highlights for the first quarter of 2007 compared to the corresponding period in the prior year.
Three months ended March 31, 2007 2006 Average daily production: Crude oil (bopd) 23,105 18,627 Natural gas (Mcfd) 28,835 25,401 Crude oil equivalent (boepd) 27,911 22,861 Average prices: (1) Crude oil ($ / Bbl) $48.48 $52.81 Natural gas ($ / Mcf) $6.15 $7.13 Crude oil equivalent ($ / boe) $46.47 $50.86 Production expense ($ / boe) (1) $6.40 $7.93 EBITDAX (in thousands) (2) $90,996 $77,617 Net income (in thousands) (3) $53,814 $50,293 Diluted earnings per share $0.34 $0.32 (1) Oil sales volumes are 16 MBbls and 96 MBbls less than oil production for the three months ended March 31, 2007 and 2006, respectively. Average prices and per unit production expense have been calculated using sales volumes. (2) EBITDAX represents earnings before interest expense, income taxes (when applicable), depreciation, depletion, amortization and accretion, property impairments, exploration expense and non-cash compensation expense. EBITDAX is not a measure of net income or cash flow as determined by generally accepted accounting principles (GAAP). A reconciliation of net income to EBITDAX is provided later in this press release. (3) Prior to the public offering, the Company was an S-corporation and income taxes were payable by its shareholders. In connection with the public offering, the Company converted to a subchapter C-corporation and will record a charge to earnings in the second quarter (estimated to be approximately $175.7 million as if the conversion occurred on December 31, 2006) to recognize deferred taxes. Thereafter, the Company will provide income taxes on net income.
Average daily production Capital expenditures (boepd) (thousands) Red River Units 12,599 $37,589 Bakken Field 8,114 47,317 Other Rockies 1,724 8,050 Mid-Continent 4,747 15,755 Gulf Coast 727 (214) Total 27,911 $108,497
During the first quarter of 2007, the Company participated in the completion of 54 gross (29.8 net) wells with a 96% gross (95% net) success rate and invested $108.5 million in drilling and capital facilities, $12.8 million for undeveloped acreage and $0.8 million for seismic. For the year, the Company plans to invest $437 million in 2007, including $363 million for drilling, $31 million for capital facilities and recompletions, $32 million for undeveloped leases and $7 million for seismic.
In the Red River Units, average daily production was up 2,956 boepd, or 31%, from the first quarter 2006 average due to increased density drilling and response from enhanced oil recovery operations. During the first quarter, the Company completed 10 gross (9.7 net) horizontal wells and 7 gross (6.7 net) horizontal re-entries within the Red River Units. The Company currently has five drilling rigs working in the Red River Units.
In the Bakken field, average daily production was up 1,555 boepd, or 24%, from the first quarter 2006 average due to results from the 640-acre infield drilling program in the Montana portion of the field and a 366 boepd gain from drilling operations in the North Dakota side. During the first quarter, the Company drilled 19 gross (11.7 net) wells in the Bakken field with 100% success. The Company currently has four operated drilling rigs working in the Montana Bakken and five drilling rigs in the North Dakota Bakken, including three drilling rigs operated under a joint venture agreement with ConocoPhillips.
In the Montana Bakken, the Company participated in 14 gross (10.2 net) completed wells during the first quarter. The Company is finishing development of its acreage on 640-acre spacing and is currently evaluating the potential to develop the Montana Bakken on 320-acre spacing. The Company's first 320-acre well, the Margaret 3-15H, was recently completed for an incremental gain of approximately 300 bopd. These initial results are in line with expectations. The Company plans to monitor the Margaret 3-15H production and drill a second 320-acre infill well during the third quarter to further test the potential for 320-acre development.
In the North Dakota Bakken, the Company participated in 5 gross (1.5 net) completed wells during the first quarter. Initial production rates from these North Dakota Bakken wells ranged from 75 bopd to 420 bopd. Recently, the Company completed the Filkowski 1-1H (63% WI) for approximately 300 gross bopd. The State Weydahl 44-36H (33 % WI) was also completed recently with initial flow rates as high as 1,000 gross bopd and was flowing approximately 560 gross bopd after 10 days of production.
In the Oklahoma Woodford Shale field in the Mid-Continent region, the Company currently has four operated drilling rigs working and plans to add a fifth drilling rig in the second half of the year. During 2007, the Company expects to invest approximately $82 million drilling 23 gross (10 net) operated wells and 100 gross (7 net) non-operated wells in the Woodford Shale field.
During the first quarter, the company completed 2 gross (.5 net) Woodford Shale wells and participated in another 12 gross (.5 net) non operated Woodford Shale completions. The two Company-operated completions, the Meyer Trust 1-13H (34% WI) and Foster 1-6H (17% WI), are currently producing approximately 3,000 Mcfd and 2,200 Mcfd of natural gas, respectively. Daily gross natural gas production from the non-operated wells averaged 2,000 Mcfd per well during the month of March. Recently, the Company completed two additional wells, the Holder 1-5H (52% WI) and Harden 1-20H (32% WI) which are producing approximately 675 Mcfd and 2,500 Mcfd, respectively. Since the beginning of the year the Company has acquired an additional 14,000 net leasehold acres in the play bringing the Company's total net leasehold in the play to approximately 44,000 net acres. The number of un-risked potential drilling locations on the Company's Woodford Shale acreage is approximately 1,900 gross (275 net), assuming 160-acre spacing.
Financial and Operational Outlook
Conference Call Information
About Continental Resources
Three months ended Condensed Consolidated Statements of Income March 31, (in thousands, except per share amounts) 2007 2006 (unaudited) Revenues: Oil and natural gas sales $115,984 $99,768 Oil and natural gas service operations 5,139 3,997 Total revenues 121,123 103,765 Operating costs and expenses: Production expense 15,985 15,562 Production tax 6,163 4,367 Exploration expense 2,304 2,082 Oil and gas service operations 3,218 2,118 Depreciation, depletion, amortization and accretion 20,409 13,292 Property impairments 2,970 1,415 General and administrative (1) 12,973 12,693 (Gain) loss on sale of assets (61) (222) Total operating costs and expenses 63,961 51,307 Income from operations 57,162 52,458 Interest expense and other 3,348 2,165 Net income $53,814 $50,293 Basic net income per share (2) $0.34 $0.32 Diluted net income per share (2) 0.34 0.32 Basic weighted average shares outstanding (2) 158,344 158,058 Diluted weighted average shares outstanding (2) 159,585 159,519 (1) Includes non-cash charges for stock-based compensation of $7.8 million and $8.1 million for the three months ended March 31, 2007 and 2006, respectively. (2) Pro forma for the 11 for 1 stock split in connection with the public offering in May 2007. Condensed Consolidated Balance Sheets March 31 December 31 (in thousands) 2007 2006 (unaudited) Assets: Cash and cash equivalents $8,080 $7,018 Receivables 101,943 89,086 Inventories and other 9,014 8,877 Net property and equipment 849,131 751,747 Other assets 2,115 2,201 Total assets $970,283 $858,929 Liabilities and shareholders' equity: Current liabilities $149,374 $188,637 Long-term debt 224,500 140,000 Other noncurrent liabilities 103,855 39,831 Shareholders' equity 492,554 490,461 Total liabilities and shareholders' equity $970,283 $858,929 Three months ended Condensed Consolidated Statements of Cash Flows March 31, (in thousands) 2007 2006 (unaudited) Net income $53,814 $50,293 Adjustments to reconcile net income to net cash provided by operating activities: Non-cash expenses 32,254 24,068 Changes in assets and liabilities (29,505) 528 Net cash provided by operating activities 56,563 74,889 Net cash used in investing activities (120,813) (58,764) Net cash provided by (used in) financing activities 65,306 (11,500) Effect of exchange rate on change in cash and cash equivalents 6 15 Net change in cash and cash equivalents 1,062 4,640 Cash and cash equivalents at beginning of period 7,018 6,014 Cash and cash equivalents at end of period $8,080 $10,654
Non-GAAP Financial Measures
Three months ended March 31, (in thousands) 2007 2006 (unaudited) Net income $53,814 $50,293 Interest expense 3,653 2,485 Depreciation, depletion, amortization and accretion 20,409 13,292 Property impairments 2,970 1,415 Exploration expense 2,304 2,082 Equity compensation 7,846 8,050 EBITDAX $90,996 $77,617
CONTACT: Don Fischbach of Continental Resources, Inc., 580-548-5137, firstname.lastname@example.org SOURCE Continental Resources, Inc.