CLR Reports 2Q16 Results -- August 3, 2016

CLR press release:

• Outstanding STACK Well Results Increase 2016 Production Guidance to 210,000 to 220,000 Boe per Day
• Capital Budget Remains Unchanged  
• Production Expense Outlook Reduced $0.50 per Barrel of Oil Equivalent (Boe)  
• New STACK Completions Extend Oil Window West: Madeline 1-9-4XH Flows at 3,538 Boe per Day (71% Oil); Frankie Jo 1-25-24XH Flows at 2,627 Boe per Day (56% Oil)  
• Enhanced Completions in SCOOP Woodford Oil Window Increase Estimated Ultimate Recovery (EUR) by ~30% to 1.3 Million Boe per Well (62% Oil) for 2-Mile Laterals
• Company Agrees to Sell Non-Strategic SCOOP Leasehold for $281 Million, with Proceeds to Be Applied to Debt Reduction 

The company reported a net loss of $119.4 million, or $0.32 per diluted share, for the quarter ended June 30, 2016.  

The Company's net loss includes certain items typically excluded by the investment community in published estimates, the result of which is often referred to as "adjusted net loss." In second quarter 2016, these typically excluded items in aggregate represented $53.5 million, or $0.14 per diluted share, of Continental's reported net loss.

EBITDAX for second quarter 2016 was $528.1 million.

"Continental once again outperformed production guidance in the second quarter thanks to the exceptional quality and performance of our Bakken, SCOOP and STACK assets, as well as exceptional execution by our teams," commented Harold Hamm, Chairman and Chief Executive Officer. "We are also on track to reduce long-term debt with our agreement to sell a second non-strategic asset for $281 million."

Based on strong operating results in first half 2016, the Company now expects production for the year will be in a range of 210,000 and 220,000 Boe per day, an increase of 5,000 Boe per day from previous guidance. Continental expects to exit the year with production between 195,000 and 205,000 Boe per day, also reflecting a 5,000 Boe per day increase.

Continental also reduced 2016 guidance for production expense per Boe and cash general and administrative (G&A) expense per Boe. Production expense is now expected to be in a range of $3.75 to $4.25 per Boe for the year, down approximately 11% ($0.50 per Boe) from the previous range. Efficiencies contributing to the lower guidance include reducing produced water expense and increasing artificial lift efficiency in the Bakken and reducing compression, saltwater disposal and chemical costs in Oklahoma.  

Total G&A expense, including cash and non-cash G&A expense, is expected to be in a reduced range of $1.85 to $2.45 per Boe for 2016. Of this total, cash G&A expense is expected to be in a range of $1.20 to $1.60 per Boe for 2016, a reduction from the previous range of $1.25 to $1.75 per Boe. 

Finally, the Company improved its outlook for oil price differential, reflecting increased crude oil production in Oklahoma, where it has lower transportation costs, and reduced transportation costs from the Bakken. Average crude oil price differential for 2016 is expected to be in a range of $7.00 to $8.00 per barrel of oil (Bo), compared with the previous range of $7.00 to $9.00.