Highlights From CLR's 1Q14 Earnings Press Release

Updates

May 8, 2014: I thought the press release was a bit "weak," but I really had no idea what to expect from investors, but the reaction does not surprise me, down over $7, down over 5%. 

If I remember, I will post an observation comparing EOG's strategy vs CLR's strategy, or so it would seem.

Original Post

Remember, this is a press release.

• adjusted net income: $272 million; $1.47 per diluted share
• 14-well Hawkinson density test production performance remains strong after 150 days of production
• strong early performance at Rollefstad density plot; eight (8) new wells have combined initial production of 22,460 boe per day (2,800/day/well = 84,000/month/well)
• EBITDAX for 1Q14 was 9% greater than 4Q13 (previous quarter); 25% greater than 1Q13
• CLR: 152,500 boepd

Other interesting notes:

CLR is in the process of adding company storage for 240,000 bbls, "providing greater flexibilitiy and improved balancing of crude oil sales logistics; will fill this storage during summer of 2014

Daily production by region, 1Q14 (numbers rounded):

• North Dakota Bakken: 84K (55% of total CLR production)
• Montana Bakken: 14K
• Bakken total (from above two): 98K (64% of total CLR production)
• Red River: 14K
• ND/MT total: 112K (74% of CLR total production)
• SCOOP: 29K
• NW Cana: 6K
• Total of SCOOP and Cana (from above two): 35K (23%)
• Arkoma: 3K
• Other: 3K

So, for me, now easier to remember: for CLR, 75% from ND/MT; 25% from Oklahoma area.

CLR continues to test completion techniques: fluid type, increased proppant, shorter stage lengths. Early results:

• slickwater increases production by approx 30% (another company reported same results)

Using slickwater,

• the 30% increase is above CLR's blended average EUR of 603,000 bbls; 
• increased cost/well: as much as $2 million more above company's goal ($8 million/well now, and $7.5 by year-end 2014)

Back of envelope: 30% of 603,000 = 181K bbls of increased productivity over life of well; at $75/bbl = $14,000,000. So, upfront costs increase by $2 million but at $75/bbl, could result in as much at $14 million more over the life of the well.

What to do? What to do? CLR will continue testing enhanced production methods on 20% of wells drilled in 2014.

See the press release of details on the increased density projects:

• Hawkinson unit
• Tangsrud unit
• Rollefstad unit

For investors: I've followed the Bakken closely since 2007; I've paid a bit of attention to how investors interrupt quarterly reports. I have no idea how investors will respond to this report. CLR has seen market value increase significantly over past six months; it will be interesting to see what the market does tomorrow based on this report. I honestly have no idea, and no opinion, except to say it's a very mixed bag.