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Continental Resources, Inc. (CLR)

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  • Mon, Mar. 30, 7:11 PM
    • A lawsuit in Oklahoma highlights a new worry for energy companies: the possibility of being forced to pay for damages from earthquakes if the tremors can be linked to oil and gas activity.
    • Oklahoma has experienced 585 quakes of 3.0 or greater magnitude last year, more than the state had in the previous 30 years combined and the most of any state in the contiguous U.S. - even California.
    • The tremors under investigation in Oklahoma and other oil-producing states have been too small to cause major damage, but the prospect of facing juries over quake-related claims is reverberating throughout the energy industry, which fears lawsuits and tighter regulations could increase costs and stall drilling.
    • In financial statements, major area operators such as Continental Resources (NYSE:CLR) have flagged potential financial risks if earthquakes lead to stricter regulations; in Arkansas, BHP and Chesapeake Energy settled a case by five homeowners in 2013 for an undisclosed sum, and in Texas, a lawsuit against EOG Resources (NYSE:EOG) for quake-related damages is pending.
    • Separately, a Bloomberg article today says CLR and its CEO, Harold Hamm, have tried to put pressure on scientific inquiries that linked Oklahoma earthquakes to fracking wastewater.
    | 6 Comments
  • Thu, Mar. 26, 5:49 PM
    • After oil's drop from more than $100/bbl to ~$50 in just months, oil producers are using hedges as a source of income rather than just as a form of insurance to lock in minimum prices for oil, Dow Jones reports.
    • Carrizo Oil & Gas (NASDAQ:CRZO), for example, has placed several hedges on ~12K bbl/day that guaranteed it at least $91/bbl on average, locking in a $166M gain which exceed its $163M in total revenue last quarter, and added new contracts guaranteeing a minimum price of $50/bbl for some of its oil this year and next as protection in case oil prices fall further.
    • Continental Resources (NYSE:CLR) dropped nearly all its oil hedges when crude was still priced at ~$80 in early November, earning $433M from the move and using the cash to cover operating costs and keep its investment grade credit rating.
    • Cashing in hedges is part of the survival strategy being used by Energy XXI (NASDAQ:EXXI), which booked a $377M loss in its latest quarter; it got $73M in January and February for cashing in some of this year's hedges, and put on new hedges at lower prices; similarly, Parsley Energy (NYSE:PE) says it brought in $63M in recent months by cashing in some of its hedges.
    • But companies are notoriously bad at choosing when to put on and take off hedges; though many U.S. oil firms, especially smaller producers, routinely use hedges to lock in prices, many were less hedged than usual heading into the oil price plunge that started last June.
    | 3 Comments
  • Wed, Mar. 25, 6:08 PM
    • The number of drill rigs in North Dakota’s oil patch has slipped below 100 for the first time in five years thanks to weaker crude oil prices.
    • Only 98 rigs are now drilling in the area, 100 fewer than on the same day a year ago and the lowest since March 2010.
    • North Dakota has been producing ~1.2M bbl/day of oil, and industry officials say ~115 rigs need to be drilling to keep that level of production.
    • Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
    | 13 Comments
  • Mon, Mar. 23, 5:37 PM
    • Top gainers, as of 5:15 p.m.: CLR +7.0%. DNR +5.6%. UBS +4.0%. AMPE +2.8%. CLNE +2.8%.
    • Top losers, as of 5:15 p.m.: JRJC -13.6%. CCM -12.8%. DPLO -3.6%. ELY -3.1%. GSAT -3.1%.
    | 10 Comments
  • Fri, Mar. 20, 10:33 AM
    • No matter how unfavorable market fundamentals may be to Bakken operators, North Dakota likely will see a big surge in production this June, potentially besting another supply record even if prices continue to crater, according to the director of the state's Department of Mineral Resources.
    • Production is expected to remain at 1.1M-1.2M bbl/day over the next few months before skyrocketing in June by nearly 10%, or an additional 75K-100K bbl/day, propelled by a state-mandated time limit on drilling and the expected trigger of a major oil tax incentive.
    • Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
    | 19 Comments
  • Thu, Mar. 19, 6:41 PM
    • Continental Resources (NYSE:CLR) spent $2.3M at a North Dakota land auction for the right to explore for crude on 160 acres, showing that demand for oil-rich acreage in the state remains strong despite the 60% drop in crude prices since last summer.
    • After five days of online bids, CLR waited until the last 30 seconds of the auction on March 10 to beat a privately held developer by $100/acre for a bid of $14.2K/acre, according to the state's Department of Trust Lands.
    • CLR, North Dakota's second largest oil producer, has taken a bullish view on crude oil and has expressed confidence that prices will rebound by December CEO Harold Hamm expects the company's output to jump as much as 20% this year.
    | 3 Comments
  • Tue, Mar. 17, 7:40 PM
    • Crude oil production at three major U.S. shale oil fields - the Eagle Ford in south Texas, the Bakken in North Dakota, and the Niobrara in Colorado and adjacent states - is projected to fall this month for the first time in six years, the Energy Information Administration says.
    • Net production from the three fields is expected to drop by a combined 24K bbl/day, but overall losses likely will be masked by production gains in the Permian Basin in west Texas and other regions.
    • It is one of the first signs that idling hundreds of drilling rigs and billions of dollars in corporate cutbacks are starting to affect the U.S. oil patch, but it also shows that drilling technology and techniques have advanced to the point that productivity gains may be negligible in some shale plays.
    • Top Eagle Ford producers: EOG, BHP, COP, CHK, MRO, APC
    • Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
    • Top Niobrara producers: NBL, APC, ECA, CHK, EOG, WPX
    | 37 Comments
  • Tue, Mar. 17, 7:12 PM
    • Most of the top 15 shale oil producers in the U.S. are heavily concentrated in basins expected by NavPort to be severely affected by the decline in prices, with one major exception: ConocoPhillips (NYSE:COP).
    • COP has the lowest well completion concentration in basins expected to suffer the greatest production cuts this year, implying less disruption than other shale competitors, according to NavPort, which collates oil well and rig data using regulatory reports.
    • All 14 of the other top producers tracked by NavPort have at least two-thirds of well completion concentrated in the basins rated with "strong" or "severe" exposure: CHK, APC, EOG, DVN, SWN, MRO, APA, SD, XOM, CLR, PXD, NBL, BHP, WLL.
    • Operators concentrated in basins that have been less severely affected - such as the Woodford, Utica and Haynesville basins - should enjoy more production than their peers through a higher volume of well completions, NavPort says.
    • The study sees the Mississippi Lime, Granite Wash, Bakken and Permian basins suffering at least a 40% Y/Y reduction in drilling.
    | 17 Comments
  • Fri, Mar. 13, 3:58 PM
    • Whiting Petroleum (WLL +3.1%) spikes on a Bloomberg report suggesting Exxon Mobil (XOM -0.2%) could be interested in the company; trading is now halted for volatility.
    • Continental Resources (CLR -4.8%), Hess (HES +0.4%) and Statoil (STO +1.4%) also are reportedly looking at WLL, according to the report, and WLL has set up a data room for potential buyers to evaluate the company’s financial information and asked them to submit bids next week.
    • WLL is the largest producer in North Dakota’s Bakken Shale, and the four rumored suitors already are among the 10 largest holders of acreage in the play.
    • WLL had been down all day on an earlier report that it was considering selling off pieces rather than the whole company.
    | 33 Comments
  • Thu, Mar. 12, 6:52 PM
    • Russians have financed the anti-fracking movement in the U.S., Continental Resources (NYSE:CLR) Chairman and CEO Harold Hamm alleged today at The Forbes Reinvent America Summit.
    • "Russia has spent a great deal of money over here to cause a panic in the United States over fracking to stop it, because suddenly their market share is going away," Hamm said.
    • The comments amplify an allegation made last year by NATO chief Anders Fogh Rasmussen, who charged that Russians were funding anti-fracking movements in Europe and in countries of the former Soviet Union.
    | 7 Comments
  • Thu, Mar. 12, 6:32 PM
    • North Dakota says production of crude oil from the Bakken Shale fell in January from all-time highs the previous month, slipping 3.3% 1.19M bbl/day from a record 1.23M bbl/day in December, according to a new report from the state's department of mineral resources.
    • As prices for Bakken sweet crude fell to a six-year low of an average of $31.41/bbl in January, down from $40.74 December, the number of completions of previously drilled wells fell sharply to 47 from 183 in the prior month.
    • The number of active rigs used to drill new wells in North Dakota sank to 111 as of today, the fewest since April 2010 and about half the peak of 218 rigs in May 2012; the state's mineral resources director predicts a bottom 100 rigs, noting that 115 active rigs are needed to maintain stable production.
    • Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
    | 38 Comments
  • Wed, Mar. 11, 11:49 AM
    • Whiting Petroleum's (NYSE:WLL) decision to put itself up for sale looks to be just the beginning of a potential wave of consolidation as $50/bbl prices undercut companies with heavy debt and high costs.
    • The value of ~75 shale-focused U.S. producers based on their reserves fell by a median of 25% Y/Y by the end of 2014, according to Bloomberg, opening up new opportunities for bigger companies with a better handle on their debt.
    • Smaller producers with significant debt that depend on higher prices to make money are the most likely early targets for buyers such as Exxon Mobil (NYSE:XOM) or Chevron (NYSE:CVX), companies that have bided their time for years; XOM CEO Rex Tillerson suggested last week that his company is keeping its eyes open for opportunities.
    • A recent analysis by Wolfe Research found the likeliest takeover candidates among major U.S. and Canadian producers included Continental Resources (NYSE:CLR), Apache (NYSE:APA), Devon Energy (NYSE:DVN) and Anadarko Petroleum (NYSE:APC).
    • WLL would be an attractive target for XOM, CVX or Hess (NYSE:HES), all of which have operations in North Dakota and would benefit from scaling up, according to a Bank of America note.
    | 18 Comments
  • Fri, Mar. 6, 5:57 PM
    • Oil drillers expecting prices to rebound have come up with an alternative to storing their crude in tanks: They’re keeping it in the ground, as drillers who have spent millions boring holes through petroleum-rich shale are just waiting for prices to go up before actually turning on the spigot.
    • The backlog of unfracked wells is one reason U.S. crude output is poised to climb even as companies have idled more than a third of the rigs that were drilling for oil in October; Continental Resources' (NYSE:CLR) Harold Hamm says ~85% of U.S. wells aren’t being completed right now.
    • Examples: Anadarko Petroleum (NYSE:APC) says it expects to have as many as 440 uncompleted wells by year's end, EOG started the year with ~200 uncompleted wells and plans to let that inventory build through H1, and Canadian Natural Resources (NYSE:CNQ) says it has 161 uncompleted wells.
    • Initial production from a new well typically is 750-1,000 bbl/day, meaning the "fracklog" could represent as much as 3M bbl/day of new output, at least at the outset - a major reason an oil price recovery will prove to be an extended process, analysts say.
    • ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, TWTI, OLEM
    • Earlier: Oil glut's latest dilemma: where to store it all
    | 60 Comments
  • Thu, Mar. 5, 11:28 AM
    • Exxon Mobil (XOM -0.5%), with $17.9B in free cash flow to end 2014, is under much less pressure to cut spending than smaller rivals, which are coming under varying degrees of financial strain amid lower oil prices; 2015 capex is being cut by 12%, a striking display of stability when compared to 30%-40% capex cuts generally announced by small and midsized E&P companies.
    • CEO Rex Tillerson says being able to keep spending at rates that others can't provides XOM "a whole lot of different kinds of opportunities” in two main areas: cutting costs and acquiring assets.
    • On acquisitions, Tillerson’s comment that “there really is no limitation on what we might be interested in or considering" in terms of possible deals suggests he is prepared to be ambitious.
    • While a rumored bid for BP is not impossible, most analysts are doubtful due to the political sensitivities of such a deal and uncertainty about liabilities from the 2010 Gulf of Mexico oil spill; Wolfe Research's Paul Sankey thinks XOM is most interested in a U.S.-focused midsized oil company, with “key potential targets” including HES, CLR, DVN, APA and APC.
    | 17 Comments
  • Mon, Mar. 2, 7:35 PM
    • The crude oil aboard the train that derailed and exploded two weeks ago in West Virginia contained so much combustible gas that it would have been barred from rail transport under safety regulations set to go into effect next month, WSJ reports.
    • The oil’s vapor pressure was 13.9 psi, which exceeds the limit of 13.7 psi that North Dakota is set to impose in April on oil moving by truck or rail from the Bakken Shale.
    • Plains All American Pipeline (NYSE:PAA), which shipped the oil, says it follows regulations governing the shipping and testing of crude; CSX, the railroad that carried the oil, says it had stepped up its inspections of the track along the route.
    • The new information about the West Virginia accident likely will increase regulators’ focus on the makeup of oil being shipped by train; oil from sahle formations is known to contain far more combustible gas than traditional crude oil, which has a vapor pressure of ~6 psi.
    • Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
    | 16 Comments
  • Thu, Feb. 26, 2:58 PM
    • North Dakota's oil producers have cut the number of active rigs in the state to just 121 from 190 a year ago, according to a new list published by the state’s Department of Mineral Resources.
    • The rig count is now below the threshold of “at least 130” the DMR director had identified last month as needed to sustain output at the current level of slightly more than 1.2M bbl/day.
    • Of the 121 active rigs, 115 are drilling in just four counties at the heart of the Bakken - Dunn, McKenzie, Mountrail and Williams.
    • With the number of rigs in even the core areas down by 30% in just over two months, production likely will begin to plateau or fall in the coming months, Reuters' John Kemp writes.
    • Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
    | 11 Comments
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Company Description
Continental Resources Inc is an independent crude oil and natural gas exploration and production company with properties in the North, South and East regions of the United States.