May 05, 2008 11:41 pm
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Staff reports
Continental Resources stock broke above $50 after a strong first quarter 2008 report announced by the company officials Monday morning.
The company’s stock hit a high of $52.15 Monday before closing at $50.97.
Continental Resources re-ported record results for the first quarter ending March 31, and the higher cash flow outlook has prompted a $167 million increase in capital expenditures for drilling, land and seismic development.
Harold Hamm, chairman and chief executive officer, outlined some of the highlights of the first-quarter report and told stockholders during a conference call while the company is successful in several areas, it will continue to take new positions in other resource plays as their potential emerges.
The company reported a net income of $88 million for the first quarter of 2008. This included an unrealized loss of $2.2 million (or $1.3 million net of taxes) recognized for the change in the fair market value of open crude derivative contracts not designated for hedge accounting.
Total revenues for the first quarter were $227.7 million, an increase of 88 percent over total revenues of $121.1 million for the first quarter of 2007. The company’s average sales price per barrel of crude oil equivalent for the first quarter was $81.35 per barrel, compared to $46.47 for the first quarter last year.
Hamm and other company officials pointed to strong play in the North Dakota and Montana portion of the Bakken Shale. Continental is the largest producer and leasehold owner in that area, with approximately 487,000 net acres. The company also is one of the most active operators in the Bakken, currently participating in one-third of the wells being drilled in the play.
“Our strategic position in the Bakken is important, but clearly illustrates the approach to U.S. resource plays,” Hamm said. “These resource plays present an historic opportunity to an exploration and production company that has the expertise to exploit them.”
Elsewhere in the Rocky Mountains operating area, Continental recently began drilling the first of eight test wells planned for the Haley prospect in Harding County, S.D. The company has 70,000 net acres leased in the Haley prospect and has acquired 100 square miles of proprietary 3D seismic over the property.
Hamm also pointed to new opportunities in the Atoka and Woodford Shale plays in western Oklahoma and the Texas Panhandle. The company re-cently acquired 64,000 net acres in the area, and drilling operations have begun.
Company officials are optimistic about these emerging shale plays, which they identified about two years ago.
“We’re excited about this emerging opportunity,” said Jack Stark, vice president of exploration.
“We clearly have tremendous growth opportunities ahead of us,” Hamm said. “We are focused on growing production reserves and our lease position, particularly in resource plays, which we believe will create significant additional value for our shareholders for many years.”
Continental Resources, Inc. is traded on the New York Stock Exchange under the symbol CLR. The company is approaching its first year anniversary as a publicly traded company.
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