Why Continental Resources, Inc. (NYSE: CLR) stock is under pressure

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Continental Resources, Inc. (NYSE: CLR) stock lost over 8.3% on Feb 22nd, 2018 (As of 9:47AM EST; Source: Google finance) hurt by volatile natural gas prices. During the fourth quarter of FY 17, the group has reported the net income of $841.9 million, out of which $128.2 million was from operations and $713.7 million was from federal tax reform. The higher contribution of federal tax reform also contributed to the weak stock momentum. The company has reported for full-year 2017, the net income of $789.4 million, with $75.7 million from operations and $713.7 million from federal tax reform.

CLR in the fourth quarter of FY 17 has reported the adjusted earnings per share of 41 cents, beating the analysts’ estimates for the adjusted earnings per share of 32 cents as per Zacks Investment Research. The company had reported the adjusted revenue grew to $1.05 billion in the fourth quarter of FY 17, beating the analysts’ estimates for revenue of $951.5 million.

 

Moreover, in the fourth quarter of FY 17, the net production had totaled 26.4 million Boe, or 286,985 Boe per day, which is an increase of 18% from third quarter 2017, with oil production up 20% to 168,066 barrels of oil (Bo) per day. Further, compared to fourth quarter 2016, CLR has increased production 37%, with oil production up 44%. The total net production for fourth quarter 2017 included 168,066 Bo per day (59% of production) and 713.5 million cubic feet (MMcf) of natural gas per day (41% of production). Full-year 2017 production averaged 242,637 Boe per day.

Meanwhile, in the fourth quarter, CLR’s Bakken net production had reached an all-time high averaging 165,598 Boe per day, which is an increase of 58% over the fourth quarter 2016. The company has completed 97 gross (37 net) operated and non-operated Bakken wells with its first production during fourth quarter 2017. Thirty-nine of the fourth quarter wells were operated by CLR with an average 24-hour IP of 2,180 Boe per day. The Company has also completed a total 350 gross (134 net) operated and non-operated Bakken wells with first production for full-year 2017. CLR has planned to keep an average of six operated drilling rigs in the play during 2018.

Furthermore, in the fourth quarter, CLR’s STACK net production has averaged 47,914 Boe per day, which is a 96% increase over fourth quarter 2016. SCOOP net production has averaged 62,242 Boe per day (23% oil) for the period, or 22% of the company’s total production in fourth quarter.

Additionally, CLR expects the first quarter 2018 production to be between 285,000 and 290,000 Boe per day.

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