Continental Resources (CLR) Q1 Results - May 4

[dan_s]

Oklahoma City, May 4, 2022 /PRNewswire/ --

Outstanding 1Q22 Results
• $1.50 B Cash Flow from Operations (CFO) & $1.15 B Free Cash Flow (FCF) (Non-GAAP) < Close to my Adjusted Operating Cash Flow (before changes in Working Capital) of $1,562 million.
• $597.8 MM Net Income; $1.65 per Diluted Share ($960.0 MM Adj. Net Income; $2.65 per Adj. Share (Non-GAAP)) < Adjusted Net Income beat my forecast of $833 million, $2.31 per share.

Increasing Shareholder Return of Capital
• Quarterly Dividend Increased to $0.28 per Share (~2.0% Dividend Yield)
• $100 MM Shares Repurchased in 1Q22 (~$960 MM Remaining in Share Buyback Program)
• $264 MM Total Debt Reduction in 1Q22 (Inclusive of $450 MM Powder River Basin Acquisition & Initial $63 MM Summit Carbon Capture Investment)

Enhancing 2022 Projections
• Increased Projected Return on Capital Employed (ROCE) to ~31% from Previous 21%
• Increased Avg. Daily Oil Production to 200 to 210 MBopd & Avg. Daily Natural Gas Production to 1.1 to 1.2 Bcfpd < This will increase my valuation.
• 220 to 230 MBopd December 2022 Avg. Daily Oil Production Exit Rate
• Projecting Full Year CFO of $6.5 to $7.0 B (Inclusive of ~$450 MM Working Capital Adjustment) and Projecting Full Year FCF of $4.3 to $4.7 B; 21% to 23% FCF Yield (Non-GAAP) < Slightly above my full-year forecast.

"Continental's outstanding first quarter 2022 results underscore our commitment to both return of capital to shareholders and corporate disciplined return on capital employed. Additionally, we continue to enhance our 2022 capital program and are realizing opportunities to optimize our operational and financial performance, as evident in our increased 2022 projected free cash flow of $4.3 to $4.7 billion, which equates to a 21% to 23% free cash flow yield. Our fifth consecutive increase to our quarterly dividend and approximately 31% projected return on capital employed continues to competitively differentiate us versus both our peers and the S&P 500 by delivering on our unique shareholder value proposition," said Bill Berry, President & Chief Executive Officer.

The Company reported net income of $597.8 million, or $1.65 per diluted share, for the quarter ended March 31, 2022. In first quarter 2022, typically excluded items in aggregate represented $362.2 million, or $1.00 per diluted share, of Continental's reported net income. Adjusted net income for first quarter 2022 was $960.0 million, or $2.65 per diluted share (non-GAAP). Net cash provided by operating activities for first quarter 2022 was $1.50 billion, and EBITDAX was $1.84 billion (non-GAAP).

1Q22 Production & Operations Update

First quarter 2022 total production averaged 373.8 MBoepd. First quarter 2022 oil production averaged 194.8 MBopd. First quarter 2022 natural gas production averaged 1,074 MMcfpd. < My forecast was Q1 oil production of 194.0 MBopd and natural gas production of 1,050 MMcfpd. Continental reports natural gas and NGLs on a combined basis, which is why their realized ngas price seems so high.

Good report that is inline with what most analysts were expecting. My pre-release valuation for CLR was $89.00. It will be going up after I update my model tomorrow after I listen to their Q1 conference call.

[Fraser921]

Nice recap, amazing how fast you can do that