CLR Forecast

[dan_s]

None of Continental Resources' oil is hedged, so if you believe oil prices will move higher after OPEC extends their production agreement then CLR is one you should take a hard look at.

Q1 results were in-line with my forecast with production of 213,701 BOE per day. The company is on-track to an exit rate approaching 260,000 BOE per day (60% crude oil) as they continue to get outstanding well results in both SCOOP and STACK.

I have updated my forecast model for CLR and it will be posted to the EPG website late today. CLR is a large-cap, but very easy to forecast since they keep it simple. Even if oil and gas prices stay exactly where they are today (extremely doubtful), CLR should generate enough cash flow from operations to fully fund their $1.95 Billion capital program.

My valuation remains at $79.00, which compares to First Call's price target of $59.26.

I could easily justify a higher valuation for CLR because it has over a decade of low-risk high-rate development well inventory in Oklahoma. They hold more than 75% of the Tier One leasehold in SCOOP and they have one of the top four leasehold position in STACK.