Continental Resource (CLR) Update - July 26

[dan_s]

Second quarter 2018 production totaled 25.8 million barrels of oil equivalent (Boe), or 284,059 Boe per day, with average daily oil production of 157,000 barrels of oil (Bo) per day, which increased 25% from second quarter 2017. Second quarter production would have been just above 289,000 Boe per day except for abnormally wet weather in the Bakken and the voluntary curtailment of Midcontinent production to gain access to premium North Texas markets via the Company's previously announced Wildcat pipeline agreement. Under the Wildcat agreement, for June 2018, we realized a $0.25 per MMBtu uplift at Tolar versus selling in-basin. For July 2018, for first of month transactions we expect to realize a $0.31 price uplift at Tolar versus selling in-basin.

Following these transitory timing delays, the first half of July is estimated to have averaged 296,000-298,000 Boe per day as additional Bakken pads enter first production. Importantly, oil production for the first half of July has also recovered, averaging approximately 166,000 Bo per day, representing 25% growth when compared against July 2017. For the balance of third quarter 2018, the Company expects production to average 290,000-295,000 Boe per day, with an oil ratio approaching 57%. The Company expects the fourth quarter 2018 oil ratio to be between 58-60%. Lastly, the Company also expects production to be toward the top end of the range for both previously stated full year production and 2018 exit rate guidance.

"We expect to see a significant uplift in oil production growth in the second half of 2018 driven by our large Bakken pads and our Springer, Woodford and Sycamore assets in Project SpringBoard," said Harold Hamm, Chairman and Chief Executive Officer. "These assets will not only drive a new wave of oil production in the second half of 2018, but will also provide a catalyst for strong oil-weighted growth in 2019."
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Q2 production less than my forecast, but increase in realized natural gas prices going forward keeps my valuation of CLR at $86.00/share. NONE of CLR's oil is hedged.