Continental Resources (CLR) Q4 Results - Feb 27

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dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Continental Resources (CLR) Q4 Results - Feb 27

Post by dan_s »

CLR is taking a beating today because the entire sector is selling off and none of CLR's oil is hedged. Aside from that, Q4 were results were good.

4Q19 Results

$193.9 MM in Net Income, or $0.53 per Diluted Share
• $203.6 MM Adjusted Net Income, or $0.55 per Diluted Share < This compares to my Q4 forecast of $180.6 million net income, $0.49/share.

365,341 Boepd Average Daily Production; up 13% YoY
• 206,249 Bopd Average Daily Oil Production; up 10% over 4Q18 < This beat my forecast of 203,000 BOPD.

2020 Capital Budget & Guidance

$2.9 B to $3.0 B of Cash Flow from Operations; $350 MM to $400 MM of Free Cash Flow
• Budgeted at $55 WTI and $2.50 HH; $5 Change in WTI = Approx. $300 MM in Cash Flow

Targeting 4% to 6% Production Growth YoY Delivers Average Approx. 10% CAGR for 2019-2020
• Large Projects in 2020 Projected to Drive Double Digit Growth from FY 2020 to 4Q21

$2.65 B Capital Spend in 2020; Flat Capital Spend YoY
• $2.2 B Drilling & Completions; $125 MM for Mineral Acquisitions ($100 MM Funded by FNV)
• Approx. 20% Lower Capital Spend in 2020 than Original Five Year Vision Estimate
• Approx. $700 MM Capital Spend in 2020 with First Production Expected in 2021

Expect to Continue Delivering Lowest Cost Operations Amongst Oil-Weighted Peers
• $3.50 to $4.00 LOE per Boe | $1.60 to $2.00 Total G&A per Boe
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: Continental Resources (CLR) Q4 Results - Feb 27

Post by dan_s »

Stifel's take:

Continental Resources, Inc. (CLR, $20.78, Buy; Target $62.00)
Expect material sell-off despite strong 2019 financial performance and operational progress - Derrick Whitfield

We view the release as negative. The positives include: i) a total and oil production beat (5.2% and 0.4% above consensus, respectively),ii) an EBITDA beat driven by costs (cash costs 12.4% below Stifel), iii) positive operational updates from Project SpringBoard (4.2% oil beat in Q419, initiated 2020 oil growth guidance of 37.5%) and the Bakken (in-line productivity with 5% lower CWC from Q419 levels), and iv) initial disclosure of CLR's strategic water assets with a market value of +$1.5B. The negatives include: i) higher than expected Q419 capex (2.4% above consensus), ii) lower than expected 2020 total and oil production guidance (2.1% and 8.3% below consensus, respectively) on modestly lower capex (3.7% below consensus), iii) materially reduced 2020 ($50mm-$100mm at $50/bbl) and five-year (from $5B to $3.75B) FCF outlooks due to reduced activity and commodity assumptions. Net-net, we expect a material sell-off due to the negative FCF revisions.
Dan Steffens
Energy Prospectus Group
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