CLR Presentation -- 2Q19 -- Investor Update

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, career, or relationship decisions based on what you read here or what you think you may have read here. 

CLR website, presentations link here.

2Q19 earnings transcript: SeekingAlpha. Archived.

August, 2019, investor update, dated August 5, 2019.

Focus: shareholder returns.

Value generators, ongoing --

• sustainable, cash flow positive growth: up to $5 billion FCF next five years
• net debt reduction: $1.3 billion net debt reduction over the last three years; targeting $4.2 billion long term

Value generators, added  --

• $1 billion share repurchase program
• $92 million repurchased as of August 2, 2019
• quarterly dividend begins August, 2019: annualized: $75 million / year
• sale of water facility, $85 million, will more than pay for first year of dividends

Low cost leader among peers --

• low cost per boe: 
• LOE per BOE: less than $4.00 (about $3.75) -- better than previous guidance
• top-tier G&A: at less than $2/boe ($1.57 -- better than previous guidance), about 6% G&A/EBITA

Guidance --

• production: up slightly
• LOE per BOE: down slightly
• G&A per BOE: down moderately
• production tax: flat to slightly up (guidance: 8.5%)

Bakken --

• 22% oil growth y-o-y: 150,000 bopd
• 35 gross op wells with first production 
• 60-well-Long Creek Bakken Unit Development announced

Bakken production -- 

• 1Q19 step-outs outperforming legacy wells by 75% to 145% at 120 days;
• Average first year cumulative oil production
• flat at about 200,000 bopd, 2017 - 2018 (inclusive)
• significantly greater than the less than 150,000 bbls in 2016 and about 90,000 bbls in 2014

Long Creek Bakken Unit -- slide #12 at the presentation --

• 10 square miles
• 6,400 gross acres; 5,600 net acres
• five 1280-acre stand-up drilling units 
• 56 wells, 2 rigs
• first production: 3Q20
• drilling to begin 4Q19
• 87% average working interest
• all products to be on pipe
• row development
• installation of facilities already underway

***********************************

Observations -- Long Creek Unit

CLR's graphic of the Long Creek Unit:

Screenshot of NDIC map, Long Creek:

CLR's graphic:

• 1-2-1-1
• four drilling units, west to east

NDIC graphic, Long Creek field:

• only three drilling units, west to east
• so it looks like one unit is either in Crazy Man Creek (to the west) or the Truax (to the east) 
• we already know sections 22/27 make up one of the five drilling units

****************************************

CLR -- Yahoo!Finance

2Q19 earnings:

• missed by a penny
• 2Q19: 53 cents/share vs 73 cents/share a year ago

2Q19 revenues:

• beat estimates
• 2Q19 revenues of $1.2084 billion vs 1.166 million estimate
• 2Q19 revenues of $1.2084 billion vs 1.1371 billion a year ago quarter

Production surges:

• averaging 331,414 boepd in 2Q19 vs 284,059 one year earlier
• oil production: 193,586 bopd, up from 157,116 bopd one year ago = a 23% increase in production

Average price realized:

• 2Q19: $54.66/bbl
• 2Q18; $63.35/bbl

Total expenses jump: see linked article

Balance sheet:

• cash: $206.5 million
• debt: $5.767.3 billion

South region:

• will release seven rigs by the end of 4Q19, due to efficiency gains in Springer and Woodford
• from Reuters:
• will decrease the number of rigs it operates in Oklahoma to 12 from 19 this year, citing improved productivity.
•  “The key thing here is it emphasizes the efficiency gains we’ve received from our rigs,” Continental President Jack Stark said during an earnings call with investors. The company has not reduced the number of wells it plans to drill 

Comment: I can already see the headline -- "CLR cuts number of rigs by 40%; slowdown in sight?"