Energy Prospectus

Continental Resources Reports Second Quarter 2018 Results And Updates Full-Year Guidance

$242.5 Million in GAAP Net Income, or $0.65 per Diluted Share / $272.9 Million Adjusted Net Income, or $0.73 per Diluted Share < Compares to my forecast of $257.7 million or $0.69/share.

$800 - $900 Million Annual Free Cash Flow (Non-GAAP) Target Maintained < Agrees with my updated forecast..

2018 Annual Production Guidance Raised to 290,000 to 300,000 Boe per day - 20% to 24% Year-over-Year Growth

2018 Exit Rate Guidance Increased to 315,000 to 325,000 Boe per Day - Up 10,000 Boe per Day from Prior Guidance < This raises my 2019 forecast.

2018 Capital Expenditures Guidance Increased from $2.3 to $2.7 Billion
- $275 Million Associated with Acquiring Minerals, Partially Funded by $220 Million in Proceeds Expected to be Received in 4Q18
- $125 Million of New Capital + $75 Million in Reallocated Capital Increases 2018 Drilling & Completions Budget by $200 Million

$220 Million Minerals Divestiture & Strategic Mineral Relationship Formed
- Expect to Receive $220 Million in Proceeds in 4Q18; Used to Fund Capex Increase

2Q18 Average Daily Production up 26% Year-over-Year to 284,059 Boe per day < In line with my forecast.

2Q18 Production Expenses Improve 13% Year-over-Year to $3.49 per Boe

Bakken: Record Results and Type Curve Uplifted to 1.2 MMBoe per Well
- 2,282 Boe per Day Average Initial 24-Hour Rate for 35 Wells
- First Company Bakken Well to Achieve 30-Day Rate over 3,000 Boe per Day

SCOOP: Project SpringBoard Phase I and Phase II Drilling
- Phase I: First Springer Production Late 3Q18
- Phase II: First Woodford/Sycamore Production Anticipated 1Q19

STACK: Oil Window Drilling Accelerated with Strong Well Results
- Five Oil Wells with Initial 24-Hour Rates Ranging from 3,065 to 4,032 Boe per Day with Oil Volumes Ranging from 1,443 to 2,596 Bo per Day

I've had some people tell me that SCOOP and STACK aren't very good. That is total BS, CLR, NFX, DVN and XEC are reporting outstanding horizontal wells in these plays.

This is why I recommend Hi-Crush:

Bakken: Record Results and Type Curve Uplifted to 1.2 MMBoe per Well

Continental Resources uplifted its type curve EUR for the Bakken 9% to 1,200 MBoe per well in the second quarter. This increase reflects the Company's move from 40-stage to 60-stage completions, based on improved performance observed from 70 wells completed with the Company's 60-stage optimized completion techniques. A 60-stage completion increases the cost of a typical Bakken well by approximately $0.5 million for a total completed well cost of $8.4 million. At this cost, the 1,200 MBoe type curve delivers a 175% rate of return (ROR) at $70 WTI and approximately $0.4 million of incremental cash flow per well in the first year, as compared to the Company's previous 1,100 MBoe type curve.

"Our Bakken team continues to unlock value for our shareholders through innovative thinking and advanced technologies," said Gary Gould, Senior Vice President of Production & Resource Development. "Over the past year, our team increased our Bakken type curve twice, cumulatively raising the EUR 22%, doubling the rate of return, and adding $3.5 million of incremental first-year cash flow per well for an additional cost of only $1.4 million per well. This step change in performance is uplifting Bakken economics throughout the field. With 4,000 wells of operated inventory still ahead of us, the Bakken will be a growth vehicle for Continental for many years to come."

HCLP sells lots of Northern White Sand to the Bakken upstream companies.

I have finished reviewing the updated profile for CLR, prepared by one of our Top Shelf MBA's from SMU. Cas, who lives in North Carolina, has been helping me with profiles for almost three years. He does an excellent job. If you want to learn what is really going on in the Bakken and SCOOP/STACK, read this profile carefully.

I have also updated my forecast/valuation model for CLR, raising the valuation of their common stock by $4.00 to $90.00/share. First Call's target price is $74.66, but it should be going up when the Wall Street Gang gets around to updating their reports to Reuters.

CLR closed at $63.86 today.

NONE of CLR's oil is hedged, so it is generating lots of FREE CASH FLOW that is paying down debt. Combined with proceeds from non-core asset sales and a new "Strategic Relationship" to acquire mineral rights, the company will generate over $1 Billion of cash to shore up an already strong balance sheet.

When you get the profile, read about "Project SpringBoard". < This is why my valuation went up.

CLR has been in the Sweet 16 for almost 8 years. What I love about this company is that it has "clean" financial statements and it provides accurate guidance. With more than 20% annual production growth (most of it oil), I could easily justify a higher valuation. CLR is "Core of the Core" quality.