Energy Prospectus

CLR's Cash flow from operations came in slightly above my forecast, primarily because of lower expenses. 2016 Cash Flow From Operations should be ~ $1.2 billion, which exceeds their capex budget.

Focus this year on SCOOP and STACK where they are getting great results. EURs over a million boe per well are FANTASTIC.

I have updated my forecast model for CLR and it will be posted to the website this evening.

RISK: CLR has very little of their production hedged, so it has more exposure to a prolonged period of low oil prices. Obviously, it has more upside if oil prices do rebound.

My valuation is now $37.00, compared to First Call's price target of $30.30.

Cash flows from operations should be in the $1.1 to $1.3 billion range, compared to their capital budget of $920 million.

For reference, their cash flow from operations was $337.3 million in Q4 with realized prices of $2.49 for natural gas and $34.23/bbl for crude oil. CLR includes NGL's in their reported natural gas, which explains the higher gas prices than you may have guessed. NGL prices are definitely firming up, something that gets very little attention these days.

On the operations side, CLR continues to get FANTASTIC results in both SCOOP and STACK. They are now estimating ultimate recoveries ("EUR") of 1.7 million boe per extended reach lateral well. Production costs on these wells are ~$8.00/boe, so the economic returns are great even at today's oil price. The wells cost around $7 million to drill & complete. The produce 40% to 50% of the EUR in the first two years.