Continental produced 51,663 barrels of oil equivalent per day (Boepd) for the first quarter of 2011, a 34 percent increase over production of 38,428 Boepd for the first quarter of 2010 and an eight percent increase over fourth quarter 2010 production of 48,034 Boepd. (First quarter production was slightly above my forecast).
The Company reported EBITDAX of $268.7 million for the first quarter of 2011, a 53 percent increase over EBITDAX of $175.6 million for the first quarter of 2010 and a 22 percent increase over EBITDAX for the fourth quarter of 2010 of $220.9 million.
"Production growth continues to trend higher in the second quarter, and we are solidly on track to achieve our 2011 target of 35-to-37 percent growth," said Harold Hamm, Chairman and Chief Executive Officer. "We've made substantial progress in the past 16 months toward achieving our goal of tripling production and proved reserves from year-end 2009 to year-end 2014."
I will have my forecast updated later today.
CLR
Re: CLR
CLR is a perfect example of how distortive the accounting rules for hedges are on quarterly earnings. Imagine what someone thinks when they see a company report an 80 cent per share loss for the quarter compared to the First Call estimate of income of $0.54.
Disregarding the non-cash portion of the mark-to-market adjustment, CLR's "real" EPS were $0.53/share.
If oil and gas prices are lower at the end of Q2, CLR will report a big non-cash gain on their hedges. Does that make any sense to the average investor?
This is why, for E&P companies, you must stay focused on cash flow per share and ignore reported earnings.
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For the first quarter of 2011, the Company reported a net loss of $137.2 million, or $0.80 per diluted share, compared with net income for the first quarter of 2010 of $72.5 million, or $0.43 per diluted share.
The first quarter net loss reflected a $369.3 million loss on mark-to-market derivative instruments, 99 percent of which was non-cash and unrealized. It consisted of a $364.1 million unrealized loss and a $5.2 million realized loss. The unrealized mark-to-market loss relates to derivative instruments covering the period from the current date through year-end 2013. Over this 32-month period, actual realized derivative settlements may differ significantly from the unrealized mark-to-market valuation at March 31, 2011.
Company earnings were reduced by $1.33 per share on an after-tax basis by the combined impact of the non-cash, unrealized derivatives loss and a small property impairment loss, offset partially by a small gain on sale of assets.
"As our growth rate has accelerated, we've layered in derivatives to limit the potential volatility of cash flow that will support our growth," Mr. Hamm said. "We have exceptionally valuable assets in place, including our tremendous acreage position in the Bakken and other crude oil and liquids-rich gas assets. With consistently increasing cash flow, we are well-positioned to accomplish our long-term growth and value-creation plan."
Disregarding the non-cash portion of the mark-to-market adjustment, CLR's "real" EPS were $0.53/share.
If oil and gas prices are lower at the end of Q2, CLR will report a big non-cash gain on their hedges. Does that make any sense to the average investor?
This is why, for E&P companies, you must stay focused on cash flow per share and ignore reported earnings.
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For the first quarter of 2011, the Company reported a net loss of $137.2 million, or $0.80 per diluted share, compared with net income for the first quarter of 2010 of $72.5 million, or $0.43 per diluted share.
The first quarter net loss reflected a $369.3 million loss on mark-to-market derivative instruments, 99 percent of which was non-cash and unrealized. It consisted of a $364.1 million unrealized loss and a $5.2 million realized loss. The unrealized mark-to-market loss relates to derivative instruments covering the period from the current date through year-end 2013. Over this 32-month period, actual realized derivative settlements may differ significantly from the unrealized mark-to-market valuation at March 31, 2011.
Company earnings were reduced by $1.33 per share on an after-tax basis by the combined impact of the non-cash, unrealized derivatives loss and a small property impairment loss, offset partially by a small gain on sale of assets.
"As our growth rate has accelerated, we've layered in derivatives to limit the potential volatility of cash flow that will support our growth," Mr. Hamm said. "We have exceptionally valuable assets in place, including our tremendous acreage position in the Bakken and other crude oil and liquids-rich gas assets. With consistently increasing cash flow, we are well-positioned to accomplish our long-term growth and value-creation plan."
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: CLR
Conference Call very positive. CLR is on-track to increase production by more than 35% this year. Q1 production came in over my forecast. My updated forecast will be available under the Sweet 16 soon.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group