Continental Resources: Cash Flow-Positive In 2016 At $60 Oil
Richard Zeits • 11 Comments
Richard Zeits • 11 Comments
Continental Resources: What Oil Price Is Discounted In The Current Stock Price?
Richard Zeits • 27 Comments
Richard Zeits • 27 Comments
Can Continental Grow At 25% With Oil At $65?
Richard Zeits • 38 Comments
Richard Zeits • 38 Comments
Thu, Jul. 21, 5:48 AM
- Fracker-in-chief? Republican presidential candidate Donald Trump is considering nominating Continental Resources (NYSE:CLR) CEO Harold Hamm as energy secretary if elected to the White House on Nov. 8.
- Trump also spoke on the future of NATO. In his strongest remarks to date, he said the U.S. would only defend alliance members attacked by Russia after reviewing whether those nations "have fulfilled their obligations to us."
Mon, Jul. 18, 3:58 PM
- Pioneer Natural Resources (PXD +0.1%), EP Energy (EPE +0.9%), Carrizo Oil & Gas (CRZO +2.8%), Sanchez Energy (SN +2.5%) and Synergy Resources (SYRG -0.1%) are all upgraded to Buy at KLR Group in advance of Q2 earnings reports.
- At the same time, the firm downgrades Devon Energy (DVN -0.4%), Consol Energy (CNX -1.3%) and Continental Resources (CLR +0.4%) to Accumulate from Buy on valuation given their substantial share price appreciation over the past four months.
- KLR expects the U.S. E&P industry's cost intensity to decline another 10% this year as capital spending is rationalized another 45%, but it anticipates spending ultimately will increase ~70% "assuming a substantive recovery in commodity prices."
- The firm's new stock price targets are $218 for PXD, $6.50 for EPE, $49 for CRZO, $9 for SN, $9 for SYRG, $44 for DVN, $20 for CNX and $54 for CLR.
Wed, Jul. 13, 2:28 PM
- Lower costs and improved productivity have enabled U.S. shale oil drillers to made major strides in adapting to lower crude prices, energy consultant Wood Mackenzie says.
- Shale drillers have cut the costs of producing new supplies of oil by as much as 40% in the past two years by pushing for lower rates from the companies that provide rigs, pipes and other services.
- Wood Mackenzie estimates that oil companies could make money in west Texas' Bone Spring and Wolfcamp tight oil plays with $37/bbl oil, the Eagle Ford Shale in south Texas could turn a profit at $48/bbl, the average breakeven price in North Dakota’s Bakken Shale is $58/bbl, while breakeven at Oklahoma’s SCOOP region is $35/bbl.
- The report says the big winners will be incumbent operators in the key shale oil patches in the lower 48 U.S. states, such as in the Mid-Continent and Permian Basin, including U.S. independents such as EOG Resources (EOG -1.7%), Pioneer Natural Resources (PXD -2.1%), Continental Resources (CLR -2.1%) and Apache (APA -1.9%), as well as oil giants Exxon Mobil (XOM -0.5%) and Chevron (CVX -0.2%).
Thu, Jun. 30, 6:38 PM
- The number of earthquakes in Oklahoma has fallen 25% YTD from a year ago, a decline attributed in part to actions by state regulators to restrict the oil and gas industry’s practice of pumping wastewater from its operations deep underground.
- More than 2,700 temblors of magnitude 2.5 or higher occurred in Oklahoma last year, according to the U.S. Geological Survey; the state experienced 1,097 quakes of similar magnitude in the first six months of this year, down from ~1,400 over the same period in 2015.
- Oklahoma's leading oil and gas producers include CLR, CHK, DVN, MRO, NFX and XEC.
Mon, Jun. 20, 2:25 PM
- Marathon Oil (MRO +10.4%) powers higher after snapping up P-E-backed PayRock Energy for $888M, increasing its footprint in Oklahoma's prolific STACK oil play.
- MRO expects internal rates of return for the new addition of 60%-80% before taxes at a WTI price of $50/bbl.
- CEO Lee Tillman says MRO would ratchet up drilling activity if crude prices held above $50/bbl for a while, and that the Oklahoma oil region is profitable enough that it can compete for capital against the company’s other oil plays.
- SunTrust analysts consider ~60% of Payrock’s position to be in the core STACK, and estimates the core acreage value at ~$15K/acre, which appears in line with recent transactions.
- The firm also thinks MRO's move is good news for core STACK players Newfield Exploration (NFX +0.5%), Cimarex Energy (XEC +1.3%), Continental Resources (CLR +1.2%), Devon Energy (DVN +4.6%) and Chesapeake Energy (CHK +3.3%).
Thu, Jun. 16, 12:19 PM
- North Dakota’s crude oil production fell by the largest amount ever for a single month, sinking 6.3% to 1.04M bbl/day in April from a revised 1.11M bbl/day in March.
- The North Dakota Department of Mineral Resources cites low crude oil prices but also windy weather throughout much of the month, which delays the fracking of wells, adding that it expects the slide to accelerate through May and into the summer.
- There are 28 drilling rigs currently active in the state, up from 27 in May which was the fewest since July 2005; at its peak, North Dakota had 218 rigs drilling in May 2012.
- Companies with a Bakken presence include: CLR, ERF, EOG, HK, HES, MRO, OAS, QEP, SM, STO, TPLM, WLL.
Mon, Jun. 13, 2:45 PM
- Plenty of upside remains in E&P names even after sharp YTD gains, Morgan Stanley analysts say amid confidence that the oil market recovery is occurring and oil prices will need to hit $80/bbl or so to deliver the production growth the world will need.
- Given recent production outages, the firm sees a risk of an H2 pullback yet also a long-term recovery that is "the bigger and a higher conviction event in a low conviction world and we add risk, yet not go 'all-in' here."
- Stanley upgrades Concho Resources (CXO +0.1%) and Cenovus Energy (CVE +0.9%) to Overweight from Equal Weight, and says it also remains positive on Pioneer Natural Resources (PXD +0.6%), Devon Energy (DVN +2.4%), Continental Resources (CLR +1.7%) and Cimarex Energy (C -0.8%); the firm cuts Occidental Petroleum (OXY -0.3%) to Equal Weight from Overweight on relative value.
Thu, Jun. 9, 7:15 PM
- CEO Harold Hamm says Continental Resources (NYSE:CLR) has begun finishing oil wells that had been left uncompleted after plunging crude oil prices forced it to halt projects to conserve cash flows.
- Crude has now risen enough in the past four months for CLR to devote fracking crews to unfinished wells in the Bakken shale region, although crude needs to exceed $60/bbl before the company would deploy rigs to drill fresh wells, Hamm tells Bloomberg.
- The oversupply of crude that crushed oil prices has disappeared, and supplies will fall short of demand by as much as 2M bbl/day next year, adding impetus to the current crude rally, according to Hamm, who adds that WTI could hit $70 by the end of 2016.
- Video: Oil above $60 would justify new drilling
- Video: Why I predict $70 oil by the end of the year
Mon, Jun. 6, 11:46 AM
- Continental Resources (CLR +1.7%) is higher after Credit Suisse initiates coverage with a Neutral rating and $43 price target after the stock more than doubles off YTD lows.
- However, the firm says CLR's large acreage positions in the Bakken, STACK and SCOOP "offer captured resource development opportunities as commodity prices increase"; the STACK has been among the best improvers among shale, with higher oil cuts, flow rates and encouraging spacing tests, and CLR has low breakeven inventory in the Springer and core Bakken.
- CLR “has demonstrated strong operational credentials in shale and offers investors oil beta given the relatively high share of oil in production (66%),” Credit Suisse says.
Thu, May 26, 6:51 PM
- Donald Trump said today he would approve TransCanada's (NYSE:TRP) Keystone XL pipeline proposal if elected, but would demand a “better deal” by receiving “a piece of the profits" for the U.S.; he did not elaborate on how profits would be calculated or collected.
- Trump also said at a press conference in North Dakota, where he gave a speech to an oil conference on the energy policies he would pursue if elected to the White House, that he would seek to cut regulation on the energy industry to make drillers and coal companies more competitive.
- The Republican presidential candidate said he would support fracking if elected, saying his Democrat opponents would ban fracking; he spoke with Continental Resources (NYSE:CLR) CEO Harold Hamm at his side.
Wed, May 18, 12:45 PM
- The Oklahoma Senate has passed a bill suspending a tax incentive for the oil industry that OilPrice.com thinks will force many smaller producers out of business.
- Oklahoma lawmakers voted to eliminate a rebate for the worst-performing wells in order to help plug a $1.3B budget gap; while barely utilized during the boom years, the cost of that tax credit grew to more than $130M last year as sinking prices made more wells unprofitable.
- Oklahoma's leading oil and gas producers include CLR, CHK, DVN, MRO and NFX.
Wed, May 18, 12:28 PM
- Continental Resources (CLR +1.8%) says it has completed an industry record well in the over-pressured oil window of Oklahoma's STACK play that is performing near the lowest costs ever for the company.
- CLR says its Verona well flowed at an initial 24-hour test rate of 3,339 boe/day, comprised of 2,345 barrels of oil (70% of production) and 6M cf of 1,370-BTU natural gas.
- The Verona well is CLR’s ninth in the STACK area, all of which the company says are strong producers; CLR has 11 total drilling rigs deployed in STACK.
- Now read Continental Resources: Prosperity of the fittest
Wed, May 11, 6:48 PM
- The EPA tomorrow will issue the first U.S. standards aimed at curbing methane emissions from the oil and natural gas industry, WSJ reports.
- The rules, which will affect only new oil and natural gas wells, will require companies to install technologies to monitor and limit inadvertent emitting of methane during the production and transmission process of natural gas, and require new practices such as regular inspections for leaks.
- Meanwhile, a new study says the Bakken oil-producing region of North Dakota and Montana leaks 275K tons/year of methane, a sizeable amount but less than previously believed.
- Companies with a Bakken presence include: CLR, ERF, EOG, HK, HES, MRO, OAS, QEP, SM, STO, TPLM, WLL
Thu, May 5, 11:23 AM
- Continental Resources (CLR +12.1%) surges higher after missing Q1 earnings expectations but beating on revenues, and increasing FY 2016 production guidance.
- CLR says Q1 net production averaged 230.8K boe/day, up 3% Q/Q and up 12% Y/Y, prompting it to raise full-year production guidance to 205K-215K boe/day from a prior outlook of 200K, although average output during 2015 was 221K boe/day.
- "The resilience of our production has allowed us to increase our production guidance for 2016 without increasing capex. This reflects the quality of our assets and the success of our enhanced completion technology," CEO Harold Hamm says.
- CLR says its oil sold for $25.72/bbl during Q1, down 33% Y/Y, while production costs fell by 26% to $3.76/bbl.
- CLR also brought online a net 10 wells that had been drilled and completed in 2015 but not actively produced until Q1.
- Raymond James upgrades shares to Strong Buy from Outperform, which says CLR offers attractive leverage to the turn in oil prices with its exposure to Mid-continent resource plays and its peer-leading Bakken position.
Thu, May 5, 9:12 AM
- Gainers: SYNC +143%. LGCY +31%. AAWW +27%. EPE +21%. FCEL +19%. WTW +15%. DNR +14%. ZNGA +14%. CHK +13%. BCEI +12%. UNXL +12%. ARRS +10%. CRC +10%. CLMT +9%. ORIG +9%. QRVO +8%. GSV +8%. HMY +8%. VNR +7%. MEET +7%. SDRL 7%. CLR 6%. SGYP 6%. OAS 5%. REGN 5%. BABA 5%. AUY 5%.
- Losers: PTX -37%. FRSH -27%. SQNM -19%. FIT -13%. EBIO -11%. LB -10%. WFT -9%. SEAS -8%. ABC -8%. CTL -5%.
Wed, May 4, 4:25 PM
Continental Resources, Inc. engages in the exploration and production of crude oil and natural gas. Its operations are focused on the Red River Units, Anadarko Woodford and Bakken field plays. The company was founded by Harold G. Hamm in 1967 and is headquartered in Oklahoma City, OK.
Sector: Basic Materials
Industry: Oil & Gas Drilling & Exploration
Country: United States
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