OKLAHOMA CITY, April 28, 2021 /PRNewswire/ --
• Quarterly Dividend Doubled to
$0.11 per Share
o Payable on May
24, 2021 to Stockholders of Record on May 10, 2021
• $260
Million Net Income & $0.72
Earnings per Share in 1Q21
• $3.1
Billion Projected Full-Year 2021 Cash Flow from Operations
& $1.7 Billion
Projected Full-Year 2021 Free Cash Flow
(Non-GAAP) at $60 WTI &
$2.75 HH
• Accelerating Projected Debt Reduction
to Below $4.0 Billion by Year-End
2021
• Projecting Approximately 12% Return
on Capital Employed1 (ROCE) in 2021
Continental Resources, Inc. (NYSE: CLR) (the "Company") today
announced its first quarter 2021 operating and financial
results.
Logo -
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"Continental's outstanding first quarter results and accelerated
shareholder returns, which includes our reinstated dividend and
exceptional progress on debt reduction, underscore Continental's
commitment to delivering strong cash flow generation, consistent
asset performance and operational excellence," said Bill Berry, Chief Executive Officer.
The Company reported net income of $259.6
million, or $0.72 per diluted
share, for the quarter ended March 31,
2021. In first quarter 2021, typically excluded items in
aggregate represented $19.2 million,
or $0.05 per diluted share, of
Continental's reported net income. Adjusted net income for first
quarter 2021 was $278.9 million, or
$0.77 per diluted share (non-GAAP).
Net cash provided by operating activities for first quarter 2021
was $1.04 billion and EBITDAX was
$962.6 million (non-GAAP).
Adjusted net income, adjusted net income per share, EBITDAX,
free cash flow, net debt, net sales prices and cash general and
administrative (G&A) expenses per barrel of oil equivalent
(Boe) presented herein are non-GAAP financial measures. Definitions
and explanations for how these measures relate to the most directly
comparable U.S. generally accepted accounting principles (GAAP)
financial measures are provided at the conclusion of this press
release.
___________________________________
|
1 Return on capital employed
represents net income attributable to the Company before non-cash
gains and losses on derivatives, income taxes, non-cash equity
compensation expense, interest expense, and gains and losses on
extinguishment of debt, the result of which is divided by average
capital employed for the year, with capital employed representing
the sum of total debt and total shareholders' equity attributable
to the Company.
|
Outstanding 1Q21 Financial Results; Reinstates Dividend &
Accelerates Shareholder Returns
The Company's Board of Directors approved the reinstatement of
the quarterly dividend at $0.11 per
share on the Company's outstanding common stock, payable on
May 24, 2021 to stockholders of
record on May 10, 2021. This dividend
is double the Company's previous quarterly dividend and underscores
the Company's commitment to delivering strong shareholder capital
returns.
The Company now projects to generate $3.1
billion of cash flow from operations and $1.7 billion of free cash flow (non-GAAP) for
full-year 2021 at $60 per barrel WTI
and $2.75 per Mcf Henry Hub. This is
an approximately 30% increase to projected cash flow from
operations versus original 2021 guidance.
Given the Company's significant annual cash flow generation, the
Company is accelerating its debt reduction and projects debt below
$4 billion by year end 2021. As
previously announced, the Company has reduced its total debt to
$4.97 billion, with a cash balance of
$96 million, equating to net debt of
$4.88 billion (non-GAAP) as of
March 31, 2021.
The Company's second quarter 2021 to fourth quarter 2021 crude
oil differentials guidance per barrel of oil is projected to
average ($3.75) to ($4.75) and the Company's natural gas
differentials guidance per Mcf is projected to average ($0.50) to $0.00.
Additionally, the Company is projecting an approximately 12%
ROCE in 2021.
Production & Operations Update
First quarter 2021 total production averaged 307.9 MBoepd. First
quarter 2021 oil production averaged 151.9 MBopd. First quarter
2021 natural gas production averaged 936.5 MMcfpd.
The following table provides the Company's average daily
production by region for the periods presented.
|
|
1Q
|
|
1Q
|
|
Boe per
day
|
2021
|
|
2020
|
|
Bakken
|
160,577
|
|
|
201,502
|
|
|
South
|
138,396
|
|
|
152,010
|
|
|
All other
|
8,969
|
|
|
7,329
|
|
|
Total
|
307,942
|
|
|
360,841
|
|
Financial Update
"Strong first quarter 2021 results underscore our commitment to
capital discipline and were driven by the significant cost
performance and operational efficiencies of our teams," said
John Hart, Senior Vice
President, Chief Financial Officer & Chief Strategy
Officer.
The Company's full 2021 guidance, capital expenditures budget
and operating details can be found at the conclusion of this press
release.
1Q 2021 Financial
Update
|
Three Months
Ended
March 31, 2021
|
|
Cash and Cash
Equivalents
|
$96.1
million
|
|
Total Debt
|
$4.97
billion
|
|
Net Debt
(non-GAAP)(1)
|
$4.88
billion
|
|
Average Net Sales
Price (non-GAAP)(1)
|
|
|
Per Barrel of
Oil
|
$53.09
|
|
Per Mcf of
Gas
|
$5.56
|
|
Per Boe
|
$43.11
|
|
Production Expense
per Boe
|
$3.35
|
|
Total G&A
Expenses per Boe
|
$1.90
|
|
Crude Oil Net Sales
Price Discount to NYMEX ($/Bbl)
|
($4.52)
|
|
Natural Gas Net Sales
Price Premium to NYMEX ($/Mcf)
|
$2.87
|
|
Non-Acquisition
Capital Expenditures attributable to CLR
|
$293.4
million
|
|
Exploration &
Development Drilling & Completion
|
$255.6
million
|
|
Leasehold and
minerals
|
$7.7
million
|
|
Workovers,
Recompletions and Other
|
$30.1
million
|
|
Minerals attributable
to FNV
|
$0.9
million
|
|
|
(1) Net debt and net
sales prices represent non-GAAP financial measures. Further
information about these non-GAAP financial measures as well as
reconciliations to the most directly comparable U.S. GAAP financial
measures are provided subsequently under the header Non-GAAP
Financial Measures.
|
The following table provides the Company's production results,
per-unit operating costs, results of operations and certain
non-GAAP financial measures for the periods presented. Average net
sales prices exclude any effect of derivative transactions.
Per-unit expenses have been calculated using sales volumes.
|
|
Three months ended
March 31,
|
|
|
|
2021
|
|
2020
|
|
Average daily
production:
|
|
|
|
|
|
Crude oil (Bbl per
day)
|
|
151,852
|
|
|
200,671
|
|
|
Natural gas (Mcf per
day)
|
|
936,540
|
|
|
961,022
|
|
|
Crude oil equivalents
(Boe per day)
|
|
307,942
|
|
|
360,841
|
|
|
Average net sales
prices (non-GAAP), excluding effect from derivatives:
(1)
|
|
|
|
|
|
|
|
|
|
Crude oil
($/Bbl)
|
|
$
|
53.09
|
|
|
$
|
39.64
|
|
|
Natural gas
($/Mcf)
|
|
$
|
5.56
|
|
|
$
|
0.90
|
|
|
Crude oil equivalents
($/Boe)
|
|
$
|
43.11
|
|
|
$
|
24.44
|
|
|
Production expenses
($/Boe)
|
|
$
|
3.35
|
|
|
$
|
3.61
|
|
|
Production taxes (%
of net crude oil and natural gas sales)
|
|
7.0%
|
|
|
8.9%
|
|
|
DD&A
($/Boe)
|
|
$
|
18.35
|
|
|
$
|
16.35
|
|
|
Total general and
administrative expenses ($/Boe) (2)
|
|
$
|
1.90
|
|
|
$
|
1.31
|
|
|
Net income (loss)
attributable to Continental Resources (in thousands)
|
|
$
|
259,642
|
|
|
$
|
(185,664)
|
|
|
Diluted net income
(loss) per share attributable to Continental Resources
|
|
$
|
0.72
|
|
|
$
|
(0.51)
|
|
|
Adjusted net income
(loss) (non-GAAP) (in thousands) (1)
|
|
$
|
278,890
|
|
|
$
|
(27,567)
|
|
|
Adjusted diluted net
income (loss) per share (non-GAAP) (1)
|
|
$
|
0.77
|
|
|
$
|
(0.08)
|
|
|
Net cash provided by
operating activities (in thousands)
|
|
$
|
1,040,260
|
|
|
$
|
663,818
|
|
|
EBITDAX (non-GAAP)
(in thousands) (1)
|
|
$
|
962,636
|
|
|
$
|
594,247
|
|
|
|
|
|
|
|
|
(1) Net sales prices,
adjusted net income (loss), adjusted diluted net income (loss) per
share, and EBITDAX represent non-GAAP financial measures. Further
information about these non-GAAP financial measures as well as
reconciliations to the most directly comparable U.S. GAAP financial
measures are provided subsequently under the header Non-GAAP
Financial Measures.
|
|
|
|
|
|
|
(2) Total general and
administrative expense is comprised of cash general and
administrative expense and non-cash equity compensation expense.
Cash general and administrative expense per Boe was $1.29 and $0.81
for 1Q 2021 and 1Q 2020, respectively. Non-cash equity compensation
expense per Boe was $0.61 and $0.50 for 1Q 2021 and 1Q 2020,
respectively.
|
First Quarter Earnings Conference Call
The Company plans to host a conference call to discuss first
quarter 2021 results on Thursday, April 29,
2021 at 12:00 p.m. ET
(11:00 a.m. CT). Those wishing to
listen to the conference call may do so via the Company's website
at www.CLR.com or by phone:
Time and
date:
|
12:00 p.m. ET,
Thursday, April 29, 2021
|
Dial-in:
|
1-888-317-6003
|
Intl.
dial-in:
|
1-412-317-6061
|
Conference
ID:
|
8019515
|
|
|
A replay of the call
will be available for 14 days on the Company's website or by
dialing:
|
|
Replay
number:
|
1-877-344-7529
|
Intl.
replay:
|
1-412-317-0088
|
Conference
ID:
|
10153636
|
The Company plans to publish a first quarter 2021 summary
presentation to its website at www.CLR.com prior to the start
of its conference call on Thursday, April
29, 2021.
About Continental Resources
Continental Resources (NYSE: CLR) is a top 10 independent oil
producer in the U.S. and a leader in America's energy renaissance.
Based in Oklahoma City,
Continental is the largest leaseholder and the largest producer in
the nation's premier oil field, the Bakken play of North Dakota and Montana. The Company has significant positions
in Oklahoma, including its SCOOP
Woodford and SCOOP Springer discoveries and the STACK play. The
Company also has a newly acquired position in the Powder River
Basin play of Wyoming. With a
focus on the exploration and production of oil, Continental has
unlocked the technology and resources vital to American energy
independence and our nation's leadership in the new world oil
market. In 2021, the Company will celebrate 54 years of operations.
For more information, please visit www.CLR.com.
Cautionary Statement for the Purpose of the "Safe Harbor"
Provisions of the Private Securities Litigation Reform Act of
1995
This press release includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All statements
included in this press release other than statements of historical
fact, including, but not limited to, forecasts or expectations
regarding the Company's business and statements or information
concerning the Company's future operations, performance, financial
condition, production and reserves, schedules, plans, timing of
development, rates of return, budgets, costs, business strategy,
objectives, and cash flows are forward-looking statements. When
used in this press release, the words "could," "may," "believe,"
"anticipate," "intend," "estimate," "expect," "project," "budget,"
"target," "plan," "continue," "potential," "guidance," "strategy,"
and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
such identifying words.
Forward-looking statements are based on the Company's current
expectations and assumptions about future events and currently
available information as to the outcome and timing of future
events. Although the Company believes these assumptions and
expectations are reasonable, they are inherently subject to
numerous business, economic, competitive, regulatory and other
risks and uncertainties, most of which are difficult to predict and
many of which are beyond the Company's control. No assurance can be
given that such expectations will be correct or achieved or that
the assumptions are accurate. The risks and uncertainties include,
but are not limited to, commodity price volatility; the geographic
concentration of our operations; financial market and economic
volatility; the effects of any national or international health
crisis; the inability to access needed capital; the risks and
potential liabilities inherent in crude oil and natural gas
drilling and production and the availability of insurance to cover
any losses resulting therefrom; difficulties in estimating proved
reserves and other reserves-based measures; declines in the values
of our crude oil and natural gas properties resulting in impairment
charges; our ability to replace proved reserves and sustain
production; our ability to pay future dividends, reduce debt, or
complete share repurchases; the availability or cost of equipment
and oilfield services; leasehold terms expiring on undeveloped
acreage before production can be established; our ability to
project future production, achieve targeted results in drilling and
well operations and predict the amount and timing of development
expenditures; the availability and cost of transportation,
processing and refining facilities; legislative and regulatory
changes adversely affecting our industry and our business,
including initiatives related to hydraulic fracturing and
greenhouse gas emissions; increased market and industry
competition, including from alternative fuels and other energy
sources; and the other risks described under Part I, Item 1A. Risk
Factors and elsewhere in the Company's Annual Report on Form 10-K
for the year ended December 31, 2020,
registration statements and other reports filed from time to time
with the SEC, and other announcements the Company makes from time
to time.
Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date on
which such statement is made. Should one or more of the risks or
uncertainties described in this press release occur, or should
underlying assumptions prove incorrect, the Company's actual
results and plans could differ materially from those expressed in
any forward-looking statements. All forward-looking statements are
expressly qualified in their entirety by this cautionary statement.
Except as otherwise required by applicable law, the Company
undertakes no obligation to publicly correct or update any
forward-looking statement whether as a result of new information,
future events or circumstances after the date of this report, or
otherwise.
Readers are cautioned that initial production rates are subject
to decline over time and should not be regarded as reflective of
sustained production levels. In particular, production from
horizontal drilling in shale oil and natural gas resource plays and
tight natural gas plays that are stimulated with extensive pressure
fracturing are typically characterized by significant early
declines in production rates.
We use the term "EUR" or "estimated ultimate recovery" to
describe potentially recoverable oil and natural gas hydrocarbon
quantities. We include these estimates to demonstrate what we
believe to be the potential for future drilling and production on
our properties. These estimates are by their nature much more
speculative than estimates of proved reserves and require
substantial capital spending to implement recovery. Actual
locations drilled and quantities that may be ultimately recovered
from our properties will differ substantially. EUR data included
herein, if any, remain subject to change as more well data is
analyzed.
Investor
Contact:
|
Media
Contact:
|
Rory
Sabino
|
Kristin
Thomas
|
Vice President,
Investor Relations
|
Senior Vice
President, Public Relations
|
405-234-9620
|
405-234-9480
|
Rory.Sabino@CLR.com
|
Kristin.Thomas@CLR.com
|
|
|
Lucy Spaay
|
|
Investor Relations
Analyst
|
|
405-774-5878
|
|
Lucy.Spaay@CLR.com
|
|
Continental
Resources, Inc. and Subsidiaries
|
Unaudited Condensed
Consolidated Statements of Operations
|
|
|
|
Three months ended
March 31,
|
|
|
2021
|
|
2020
|
|
|
In thousands,
except per share data
|
|
Revenues:
|
|
|
Crude oil and natural
gas sales
|
$
|
1,247,533
|
|
|
$
|
862,743
|
|
|
Loss on derivative
instruments, net
|
(43,507)
|
|
|
—
|
|
|
Crude oil and natural
gas service operations
|
11,789
|
|
|
18,058
|
|
|
Total
revenues
|
1,215,815
|
|
|
880,801
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
Production
expenses
|
93,065
|
|
|
118,478
|
|
|
Production
taxes
|
83,976
|
|
|
71,224
|
|
|
Transportation
expenses
|
50,256
|
|
|
60,502
|
|
|
Exploration
expenses
|
4,645
|
|
|
11,637
|
|
|
Crude oil and natural
gas service operations
|
4,490
|
|
|
5,910
|
|
|
Depreciation,
depletion, amortization and accretion
|
509,608
|
|
|
536,696
|
|
|
Property
impairments
|
11,436
|
|
|
222,529
|
|
|
General and
administrative expenses
|
52,848
|
|
|
42,911
|
|
|
Net (gain) loss on
sale of assets and other
|
(207)
|
|
|
4,502
|
|
|
Total operating costs
and expenses
|
810,117
|
|
|
1,074,389
|
|
|
Income (loss) from
operations
|
405,698
|
|
|
(193,588)
|
|
|
Other income
(expense):
|
|
|
|
|
Interest
expense
|
(64,951)
|
|
|
(63,594)
|
|
|
Gain (loss) on
extinguishment of debt
|
(196)
|
|
|
17,631
|
|
|
Other
|
252
|
|
|
532
|
|
|
|
(64,895)
|
|
|
(45,431)
|
|
|
Income (loss) before
income taxes
|
340,803
|
|
|
(239,019)
|
|
|
(Provision) benefit
for income taxes
|
(80,528)
|
|
|
52,235
|
|
|
Net income
(loss)
|
260,275
|
|
|
(186,784)
|
|
|
Net income (loss)
attributable to noncontrolling interests
|
633
|
|
|
(1,120)
|
|
|
Net income (loss)
attributable to Continental Resources
|
$
|
259,642
|
|
|
$
|
(185,664)
|
|
|
|
|
|
|
|
Net income (loss) per
share attributable to Continental Resources:
|
|
Basic
|
$
|
0.72
|
|
|
$
|
(0.51)
|
|
|
Diluted
|
$
|
0.72
|
|
|
$
|
(0.51)
|
|
Continental
Resources, Inc. and Subsidiaries
|
Unaudited Condensed
Consolidated Balance Sheets
|
|
|
In
thousands
|
|
March 31,
2021
|
|
December 31,
2020
|
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
96,057
|
|
|
$
|
47,470
|
|
|
Other current
assets
|
|
965,764
|
|
|
805,075
|
|
|
Net property and
equipment (1)
|
|
13,724,418
|
|
|
13,737,292
|
|
|
Other noncurrent
assets
|
|
34,688
|
|
|
43,261
|
|
|
Total
assets
|
|
$
|
14,820,927
|
|
|
$
|
14,633,098
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
Current
liabilities
|
|
$
|
1,232,242
|
|
|
$
|
860,806
|
|
|
Long-term debt, net
of current portion
|
|
4,971,055
|
|
|
5,530,173
|
|
|
Other noncurrent
liabilities
|
|
1,920,424
|
|
|
1,819,394
|
|
|
Equity attributable
to Continental Resources
|
|
6,324,078
|
|
|
6,056,446
|
|
|
Equity attributable
to noncontrolling interests
|
|
373,128
|
|
|
366,279
|
|
|
Total liabilities and
equity
|
|
$
|
14,820,927
|
|
|
$
|
14,633,098
|
|
|
|
|
|
|
|
|
(1) Balance is net of
accumulated depreciation, depletion and amortization of $15.26
billion and $14.77 billion as of March 31, 2021 and December 31,
2020, respectively.
|
Continental
Resources, Inc. and Subsidiaries
|
Unaudited Condensed
Consolidated Statements of Cash Flows
|
|
|
|
|
Three months ended
March 31,
|
|
|
In
thousands
|
|
2021
|
|
2020
|
|
|
Net income
(loss)
|
|
$
|
260,275
|
|
|
$
|
(186,784)
|
|
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
Non-cash
expenses
|
|
633,941
|
|
|
721,785
|
|
|
|
Changes in assets and
liabilities
|
|
146,044
|
|
|
128,817
|
|
|
|
Net cash provided by
operating activities
|
|
1,040,260
|
|
|
663,818
|
|
|
|
Net cash used in
investing activities
|
|
(428,084)
|
|
|
(706,739)
|
|
|
|
Net cash provided by
(used in) financing activities
|
|
(563,589)
|
|
|
521,092
|
|
|
|
Net change in cash
and cash equivalents
|
|
48,587
|
|
|
478,171
|
|
|
|
Cash and cash
equivalents at beginning of period
|
|
47,470
|
|
|
39,400
|
|
|
|
Cash and cash
equivalents at end of period
|
|
$
|
96,057
|
|
|
$
|
517,571
|
|
|
Non-GAAP Financial Measures
Non-GAAP adjusted net income (loss) and adjusted net
income (loss) per share attributable to Continental
Our presentation of adjusted net income (loss) and adjusted net
income (loss) per share that exclude the effect of certain items
are non-GAAP financial measures. Adjusted net income (loss) and
adjusted net income (loss) per share represent net income (loss)
and diluted net income (loss) per share determined under U.S. GAAP
without regard to non-cash gains and losses on derivative
instruments, property impairments, gains and losses on asset sales,
and gains and losses on extinguishment of debt as applicable.
Management believes these measures provide useful information to
analysts and investors for analysis of our operating results. In
addition, management believes these measures are used by analysts
and others in valuation, comparison and investment recommendations
of companies in the oil and gas industry to allow for analysis
without regard to an entity's specific derivative portfolio,
impairment methodologies, and property dispositions. Adjusted net
income (loss) and adjusted net income (loss) per share should not
be considered in isolation or as an alternative to, or more
meaningful than, net income (loss) or diluted net income (loss) per
share as determined in accordance with U.S. GAAP and may not be
comparable to other similarly titled measures of other companies.
The following table reconciles net income (loss) and diluted net
income (loss) per share as determined under U.S. GAAP to adjusted
net income (loss) and adjusted diluted net income (loss) per share
for the periods presented.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
|
|
2021
|
|
2020
|
|
|
|
In thousands,
except per share data
|
|
$
|
|
Diluted
EPS
|
|
$
|
|
Diluted
EPS
|
|
|
|
Net income (loss)
attributable to Continental Resources (GAAP)
|
|
$
|
259,642
|
|
|
$
|
0.72
|
|
|
$
|
(185,664)
|
|
|
$
|
(0.51)
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash loss on
derivatives
|
|
14,070
|
|
|
|
|
—
|
|
|
|
|
|
|
Property
impairments
|
|
11,436
|
|
|
|
|
222,529
|
|
|
|
|
|
|
Net (gain) loss on
sale of assets and other
|
|
(207)
|
|
|
|
|
4,502
|
|
|
|
|
|
|
(Gain) loss on
extinguishment of debt
|
|
196
|
|
|
|
|
(17,631)
|
|
|
|
|
|
|
Total tax effect of
adjustments (1)
|
|
(6,247)
|
|
|
|
|
(51,303)
|
|
|
|
|
|
|
Total adjustments, net
of tax
|
|
19,248
|
|
|
0.05
|
|
|
158,097
|
|
|
0.43
|
|
|
|
|
Adjusted net income
(loss) (non-GAAP)
|
|
$
|
278,890
|
|
|
$
|
0.77
|
|
|
$
|
(27,567)
|
|
|
$
|
(0.08)
|
|
|
|
|
Weighted average
diluted shares outstanding
|
|
362,673
|
|
|
|
|
365,403
|
|
|
|
|
|
|
Adjusted diluted net
income (loss) per share (non-GAAP)
|
|
$
|
0.77
|
|
|
|
|
$
|
(0.08)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Computed by
applying a combined federal and state statutory tax rate of 24.5%
in effect for 2021 and 2020 to the pre-tax amount of adjustments
associated with our operations in the United States.
|
|
Non-GAAP Net Debt
Net debt is a non-GAAP measure. We define net debt as total debt
less cash and cash equivalents as determined under U.S. GAAP. Net
debt should not be considered an alternative to, or more meaningful
than, total debt, the most directly comparable GAAP measure.
Management uses net debt to determine the Company's outstanding
debt obligations that would not be readily satisfied by its cash
and cash equivalents on hand. We believe this metric is useful to
analysts and investors in determining the Company's leverage
position since the Company has the ability to, and may decide to,
use a portion of its cash and cash equivalents to reduce debt. This
metric is sometimes presented as a ratio with EBITDAX in order to
provide investors with another means of evaluating the Company's
ability to service its existing debt obligations as well as any
future increase in the amount of such obligations. At March 31, 2021, the Company's total debt was
$4.97 billion and its net debt
amounted to $4.88 billion,
representing total debt of $4.97
billion less cash and cash equivalents of $96.1 million. From time to time the Company
provides forward-looking net debt forecasts; however, the Company
is unable to provide a quantitative reconciliation of the
forward-looking non-GAAP measure to the most directly comparable
forward-looking GAAP measure of total debt because management
cannot reliably quantify certain of the necessary components of
such forward-looking GAAP measure. The reconciling items in future
periods could be significant.
Non-GAAP EBITDAX
We use a variety of financial and operational measures to assess
our performance. Among these measures is EBITDAX, a non-GAAP
measure. We define EBITDAX as earnings before interest expense,
income taxes, depreciation, depletion, amortization and accretion,
property impairments, exploration expenses, non-cash gains and
losses resulting from the requirements of accounting for
derivatives, non-cash equity compensation expense, and gains and
losses on extinguishment of debt as applicable. EBITDAX is not a
measure of net income or net cash provided by operating activities
as determined by U.S. GAAP.
Management believes EBITDAX is useful because it allows us to
more effectively evaluate our operating performance and compare the
results of our operations from period to period without regard to
our financing methods or capital structure. Further, we believe
EBITDAX is a widely followed measure of operating performance and
may also be used by investors to measure our ability to meet future
debt service requirements, if any. We exclude the items listed
above from net income/loss and net cash provided by operating
activities in arriving at EBITDAX because these amounts can vary
substantially from company to company within our industry depending
upon accounting methods and book values of assets, capital
structures and the method by which the assets were acquired.
EBITDAX should not be considered as an alternative to, or more
meaningful than, net income/loss or net cash provided by operating
activities as determined in accordance with U.S. GAAP or as an
indicator of a company's operating performance or liquidity.
Certain items excluded from EBITDAX are significant components in
understanding and assessing a company's financial performance, such
as a company's cost of capital and tax structure, as well as the
historic costs of depreciable assets, none of which are components
of EBITDAX. Our computations of EBITDAX may not be comparable to
other similarly titled measures of other companies.
The following table provides a reconciliation of our net income
(loss) to EBITDAX for the periods presented.
|
|
|
Three months ended
March 31,
|
|
|
In
thousands
|
|
2021
|
|
2020
|
|
|
Net income
(loss)
|
|
$
|
260,275
|
|
|
$
|
(186,784)
|
|
|
|
Interest
expense
|
|
64,951
|
|
|
63,594
|
|
|
|
Provision (benefit)
for income taxes
|
|
80,528
|
|
|
(52,235)
|
|
|
|
Depreciation,
depletion, amortization and accretion
|
|
509,608
|
|
|
536,696
|
|
|
|
Property
impairments
|
|
11,436
|
|
|
222,529
|
|
|
|
Exploration
expenses
|
|
4,645
|
|
|
11,637
|
|
|
|
Impact from
derivative instruments:
|
|
|
|
|
|
|
Total loss on
derivatives, net
|
|
43,507
|
|
|
—
|
|
|
|
Total cash paid on
derivatives, net
|
|
(29,437)
|
|
|
—
|
|
|
|
Non-cash loss on
derivatives, net
|
|
14,070
|
|
|
—
|
|
|
|
Non-cash equity
compensation
|
|
16,927
|
|
|
16,441
|
|
|
|
(Gain) loss on
extinguishment of debt
|
|
196
|
|
|
(17,631)
|
|
|
|
EBITDAX
(non-GAAP)
|
|
$
|
962,636
|
|
|
$
|
594,247
|
|
|
The following table provides a reconciliation of our net cash
provided by operating activities to EBITDAX for the periods
presented.
|
|
|
Three months ended
March 31,
|
|
|
|
In
thousands
|
|
2021
|
|
2020
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
1,040,260
|
|
|
$
|
663,818
|
|
|
|
|
Current income tax
benefit
|
|
—
|
|
|
(2,223)
|
|
|
|
|
Interest
expense
|
|
64,951
|
|
|
63,594
|
|
|
|
|
Exploration expenses,
excluding dry hole costs
|
|
4,645
|
|
|
5,378
|
|
|
|
|
Gain (loss) on sale
of assets and other, net
|
|
207
|
|
|
(4,502)
|
|
|
|
|
Other, net
|
|
(1,383)
|
|
|
(3,001)
|
|
|
|
|
Changes in assets and
liabilities
|
|
(146,044)
|
|
|
(128,817)
|
|
|
|
|
EBITDAX
(non-GAAP)
|
|
$
|
962,636
|
|
|
$
|
594,247
|
|
|
|
Non-GAAP Free Cash Flow
Our presentation of free cash flow is a non-GAAP measure. We
define free cash flow as cash flows from operations before changes
in working capital items, less capital expenditures, excluding
acquisitions, plus noncontrolling interest capital contributions,
less distributions to noncontrolling interests. Noncontrolling
interest capital contributions and distributions primarily relate
to our relationship formed with Franco-Nevada in 2018 to fund a
portion of certain mineral acquisitions which are included in our
capital expenditures and operating results. Free cash flow is not a
measure of net income or operating cash flows as determined by U.S.
GAAP and should not be considered an alternative to, or more
meaningful than, the comparable GAAP measure, and free cash flow
does not represent residual cash flows available for discretionary
expenditures. Management believes that this measure is useful to
management and investors as a measure of a company's ability to
internally fund its capital expenditures, to service or incur
additional debt, and to measure management's success in creating
shareholder value. From time to time the Company provides
forward-looking free cash flow estimates or targets; however, the
Company is unable to provide a quantitative reconciliation of the
forward-looking non-GAAP measure to its most directly comparable
forward-looking GAAP measure because management cannot reliably
quantify certain of the necessary components of such
forward-looking GAAP measure. The reconciling items in future
periods could be significant.
The following table reconciles net cash provided by operating
activities as determined under U.S. GAAP to free cash flow for the
three months ended March 31,
2021.
|
|
|
|
|
|
In
thousands
|
|
1Q 2021
|
|
|
Net cash provided by
operating activities (GAAP)
|
|
$
|
1,040,260
|
|
|
|
Exclude: Changes in
working capital items
|
|
(146,044)
|
|
|
|
Less: Capital
expenditures (1)
|
|
(294,278)
|
|
|
|
Plus: Contributions
from noncontrolling interests
|
|
10,937
|
|
|
|
Less: Distributions
to noncontrolling interests
|
|
(4,927)
|
|
|
|
Free cash flow
(non-GAAP)
|
|
$
|
605,948
|
|
|
|
|
|
|
|
|
(1) Capital
expenditures are calculated as follows:
|
|
|
|
|
In
thousands
|
|
1Q 2021
|
|
|
Cash paid for capital
expenditures
|
|
$
|
428,182
|
|
|
|
Less: Total
acquisitions
|
|
(207,536)
|
|
|
|
Plus: Change in
accrued capital expenditures & other
|
|
70,934
|
|
|
|
Plus: Exploratory
seismic costs
|
|
2,698
|
|
|
|
Capital
expenditures
|
|
$
|
294,278
|
|
|
Non-GAAP Net Sales Prices
Revenues and transportation expenses associated with production
from our operated properties are reported separately. For
non-operated properties, we receive a net payment from the operator
for our share of sales proceeds which is net of costs incurred by
the operator, if any. Such non-operated revenues are recognized at
the net amount of proceeds received. As a result, the separate
presentation of revenues and transportation expenses from our
operated properties differs from the net presentation from
non-operated properties. This impacts the comparability of certain
operating metrics, such as per-unit sales prices, when such metrics
are prepared in accordance with U.S. GAAP using gross presentation
for some revenues and net presentation for others.
In order to provide metrics prepared in a manner consistent with
how management assesses the Company's operating results and to
achieve comparability between operated and non-operated revenues,
we may present crude oil and natural gas sales net of
transportation expenses, which we refer to as "net crude oil and
natural gas sales," a non-GAAP measure. Average sales prices
calculated using net crude oil and natural gas sales are referred
to as "net sales prices," a non-GAAP measure, and are calculated by
taking revenues less transportation expenses divided by sales
volumes, whether for crude oil or natural gas, as applicable.
Management believes presenting our revenues and sales prices net of
transportation expenses is useful because it normalizes the
presentation differences between operated and non-operated revenues
and allows for a useful comparison of net realized prices to NYMEX
benchmark prices on a Company-wide basis.
The following table presents a reconciliation of crude oil and
natural gas sales (GAAP) to net crude oil and natural gas sales and
related net sales prices (non-GAAP) for the periods presented.
|
|
|
Three months ended
March 31, 2021
|
|
|
Three months ended
March 31, 2020
|
|
|
In
thousands
|
|
Crude oil
|
|
Natural
gas
|
|
Total
|
|
|
Crude oil
|
|
Natural
gas
|
|
Total
|
|
|
Crude oil and natural
gas sales (GAAP)
|
|
$
|
768,768
|
|
|
$
|
478,765
|
|
|
$
|
1,247,533
|
|
|
|
$
|
773,770
|
|
|
$
|
88,973
|
|
|
$
|
862,743
|
|
|
|
Less: Transportation
expenses
|
|
(40,079)
|
|
|
(10,177)
|
|
|
(50,256)
|
|
|
|
(50,372)
|
|
|
(10,130)
|
|
|
(60,502)
|
|
|
|
Net crude oil and
natural gas sales (non-GAAP)
|
|
$
|
728,689
|
|
|
$
|
468,588
|
|
|
$
|
1,197,277
|
|
|
|
$
|
723,398
|
|
|
$
|
78,843
|
|
|
$
|
802,241
|
|
|
|
Sales volumes
(MBbl/MMcf/MBoe)
|
|
13,726
|
|
|
84,289
|
|
|
27,774
|
|
|
|
18,251
|
|
|
87,453
|
|
|
32,826
|
|
|
|
Net sales price
(non-GAAP)
|
|
$
|
53.09
|
|
|
$
|
5.56
|
|
|
$
|
43.11
|
|
|
|
$
|
39.64
|
|
|
$
|
0.90
|
|
|
$
|
24.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Cash General and Administrative Expenses per
Boe
Our presentation of cash general and administrative ("G&A")
expenses per Boe is a non-GAAP measure. We define cash G&A per
Boe as total G&A determined in accordance with U.S. GAAP less
non-cash equity compensation expenses, expressed on a per-Boe
basis. We report and provide guidance on cash G&A per Boe
because we believe this measure is commonly used by management,
analysts and investors as an indicator of cost management and
operating efficiency on a comparable basis from period to period.
In addition, management believes cash G&A per Boe is used by
analysts and others in valuation, comparison and investment
recommendations of companies in the oil and gas industry to allow
for analysis of G&A spend without regard to stock-based
compensation programs which can vary substantially from company to
company. Cash G&A per Boe should not be considered as an
alternative to, or more meaningful than, total G&A per Boe as
determined in accordance with U.S. GAAP and may not be comparable
to other similarly titled measures of other companies.
The following table reconciles total G&A per Boe as
determined under U.S. GAAP to cash G&A per Boe for the periods
presented.
|
|
|
Three months ended
March 31,
|
|
|
|
|
|
2021
|
|
2020
|
|
|
|
Total G&A per Boe
(GAAP)
|
|
$
|
1.90
|
|
|
$
|
1.31
|
|
|
|
|
Less: Non-cash equity
compensation per Boe
|
|
(0.61)
|
|
|
(0.50)
|
|
|
|
|
Cash G&A per Boe
(non-GAAP)
|
|
$
|
1.29
|
|
|
$
|
0.81
|
|
|
|
|
|
|
|
|
|
|
|
Continental
Resources, Inc.
|
2021
Guidance
|
As of April 28,
2021
|
|
|
|
|
2021
|
Full-year average oil
production (Bopd)
|
|
|
160,000 to
165,000
|
Full-year average
natural gas production (Mcfpd)
|
|
|
880,000 to
920,000
|
Capital expenditures
budget
|
|
|
$1.4
billion
|
|
|
|
|
Full-Year Operating
Expenses:
|
|
|
|
Production expense per
Boe
|
|
|
$3.25 to
$3.75
|
Production tax (% of net oil
& gas revenue)
|
|
|
7.9% to
8.1%
|
Cash G&A expense per
Boe(1)
|
|
|
$1.20 to
$1.40
|
Non-cash equity compensation
per Boe
|
|
|
$0.45 to
$0.55
|
DD&A per Boe
|
|
|
$16.50 to
$18.50
|
|
|
|
|
2Q21 to 4Q21 Average
Price Differentials:
|
|
|
2Q21 to
4Q21
|
NYMEX WTI
crude oil (per barrel of oil)
|
|
|
($3.75) to
($4.75)
|
Henry Hub natural gas(2) (per Mcf)
|
|
|
($0.50) to
$0.00
|
|
1. Cash G&A
is a non-GAAP measure and excludes the range of values shown for
non-cash equity compensation per Boe in the item appearing
immediately below. Guidance for total G&A (cash and non-cash)
is a projected range of $1.65 to $1.95 per Boe.
|
2. Includes
natural gas liquids production in differential range.
|
2021 Capital
Expenditures
|
|
|
|
|
|
|
The following table
provides the breakout of budgeted capital expenditures:
|
|
|
|
|
|
|
($ in
Millions)
|
North
D&C
|
South
D&C
|
Leasehold,
Facilities, Other(1)
|
|
|
Capex
|
$732
|
$380
|
$288
|
|
|
|
|
|
|
|
|
1. Includes $13
million of minerals royalty acquisitions attributable to
Continental. Excludes $52 million of minerals acquisitions
attributable to Franco-Nevada.
|
|
|
2021 Operational
Detail
|
|
|
|
|
|
|
The following table
provides additional operational detail for wells expected to have
first production in 2021:
|
|
|
|
|
|
|
Asset
|
Average
Rigs
|
Gross Operated
Wells
|
Net Operated
Wells
|
Total Net
Wells(1)
|
|
North
|
7
|
143
|
85
|
94
|
|
South
|
4
|
67
|
54
|
57
|
|
Total
|
11
|
210
|
139
|
151
|
|
|
|
|
|
|
|
1. Represents
projected net operated and non-operated wells with first
production.
|
|
|
|
|
|
|
|
|
|
|
|
View original
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SOURCE Continental Resources