Continential Resources (CLR) beat my production forecast and everyone else's too. They also increased their production guidance. The stock price dropped because they increased their capital expenditures budget. I guess Wall Street just need an excuse to sell.
By drilling more wells this year and adding more leasehold in the core areas of the Bakken, CLR will be increasing production and its proven reserves. The increased value of its proven reserves should more than offset the increase capital expenditures.
Don't give up on CLR. This is an incredible growth story. From their press release.
Continental is increasing its 2012 capital expenditure budget to $2.3 billion, excluding acquisitions, to continue development of recently acquired acreage and to fund accelerated drilling due to faster cycle times. Resulting production growth from these expenditures is expected to range from 47 percent to 50 percent for the year. [Just six months ago their guidance for 2012 was 30% production growth. - Dan]
The Company's previous 2012 capital expenditures budget was $1.75 billion, with 88 percent of the budget allocated to drilling. The budget envisioned the Company participating in completing 759 gross (249 net) wells in 2012. Company-operated wells represented 325 gross (214 net) wells in the initial 2012 plan.
Under the revised 2012 capital expenditures budget, Continental plans to participate in completing 842 gross (300 net) wells this year. Company-operated wells represent 342 gross (240 net) wells in the revised 2012 plan. Nearly all of the additional 2012 Company-operated wells are planned for the Bakken play.