Tuesday, February 16, 2021

CLR Earnings 4Q20-- February 16, 2021

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CLR closed up 5.5% today.  Investors seem happy with these results. CLR flat after hours, after announcement.

From SeekingAlpha yesterday:

  • Continental Resources is scheduled to announce Q4 earnings results on Tuesday, February 16th, after market close.

Just out:

The Company reported a full-year 2020 net loss of $596.9 million, or $1.65 per diluted share. For full-year 2020, typically excluded items in aggregate represented $172.9 million, or $0.48 per diluted share, of Continental's reported net loss. Adjusted net loss for full-year 2020 was $424.0 million, or $1.17 per diluted share (non-GAAP). Net cash provided by operating activities for full-year 2020 was $1.42 billion and EBITDAX was $1.68 billion (non-GAAP).

The Company reported a net loss of $92.5 million, or $0.26 per diluted share, for the quarter ended December 31, 2020. In fourth quarter 2020, typically excluded items in aggregate represented $10.6 million, or $0.03 per diluted share, of Continental's reported net loss. Adjusted net loss for fourth quarter 2020 was $81.9 million, or $0.23 per diluted share (non-GAAP). Net cash provided by operating activities for fourth quarter 2020 was $487.5 million and EBITDAX was $572.0 million (non-GAAP).

Adjusted net income (loss), adjusted net income (loss) per share, free cash flow, free cash flow yield, EBITDAX, 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.

Productions and operations update:

Full-year 2020 total production averaged 300,090 Boepd. Full-year 2020 oil production averaged 160,505 Bopd. Full-year 2020 natural gas production averaged 837.5 MMcfpd. Fourth quarter 2020 total production averaged 339,307 Boepd. Fourth quarter 2020 oil production averaged 176,639 Bopd. Fourth quarter 2020 natural gas production averaged 976.0 MMcfpd.

The Company achieved its 2020 completed well cost targets in both the Bakken and Oklahoma, with go forward well costs in the Bakken of approximately $690 per lateral foot, at a 10,000' lateral length, and in Oklahoma of approximately $1,070 per lateral foot, at an 8,200' lateral length. These all-in well costs include drilling and completion (D&C), full facilities and artificial lift. Cost savings are 70% to 80% structural and are being driven by a reduction in drilling cycle times, stage counts, proppant volumes and stimulation days, as well as the optimization of artificial lift.


FY20: $1.4 B Cash Flow from Operations & $275 MM Free Cash Flow (Non-GAAP)

4Q20: $488 MM Cash Flow from Operations & $332 MM Free Cash Flow (FCF)
   o $168 MM in Non-Acquisition Capex 
   o 176.6 MBopd & 976 MMcfpd Average Daily Production
   o $2.80 Production Expense per Boe

• FY20: Fifth Consecutive Year of Generating Positive FCF
   o $1.16 B in Non-Acquisition Capex ($1.2 B Guidance) 
   o 160.5 MBopd & 837.5 MMcfpd Avg. Daily Production (155-165 MBopd & 800-820 MMcfpd
   o $3.27 Production Expense per Boe ($3.50-$3.75 Guidance)

FY21: Projecting Sixth Consecutive Year of Generating Positive FCF

• In Excess of 40% of Cash Flow from Operations Projected toward Shareholder
  Capital Returns through Debt Reduction and Future Dividends1 
o Targeting Approx. $4.5 B Total Debt by YE21; <$4.0 B by YE22

• Approx. $2.4 B of Cash Flow from Operations; $1.0 B of FCF; 12% FCF Yield2  (non-GAAP)
58% Reinvestment Rate; 3-4% Total Production Growth; Budgeted at $52 WTI & $2.75 HH
   o $5 Increase in WTI = Approx. $250 MM Increase in Cash Flow

• Expanding Operations into the Oil-Weighted Wyoming Powder River Basin in March 2021
o Adds 130,000 Net Acres & 400 MMBoe Net Unrisked Resource Potential to CLR Portfolio


  1. I hope they are sandbagging. Production forecast looks way too anemic at $60 WTI and $3 natty. Don't give me the discipline crap. Don't want to hear that happy horseshit.

    1. 1. I haven't had a chance to go through the press release or the presentation yet. The conference call is tomorrow.

      2. Having said that, there are so many variables to consider. Archive it and look at production going forward and see how it plays out.

      3. If one is talking about one company (as opposed to talking about 35 companies all competing with each other) then "discipline" is certainly part of the discussion.

      4. I don't know if I follow you correctly, but if you are suggesting that at $60, their production forecast should be significantly more, all things being equal except price one can argue that Harold Hamm sees much high prices for oil five years from now than what he expects in 2021. If he sees $100 oil in 2022, for example, produce enough to pay the bill in 2021 and wait for even better times in 2022.

      5. Having said that, to repeat myself, all things are not equal. If the DAPL is shut down, takeaway capacity becomes a huge variable, and the price operators get for Bakken oil, after one subtracts out transportation, could be significantly less.

      6. So, the question I have for me -- for me -- is if indeed "they are sandbagging production forecast" why would they do that? Why would they sandbag their production forecast on the low side? Again, that's a question each analyst must attempt to answer if they come to the same conclusion, that "they are sandbagging us."

      NOTE: I don't proofread long comments for closely; there may be typographical errors.

      I forgot to mention: Bakken operators aren't seeing $60 / bbl for their oil; not even close.


    2. They could be holding back from DAPL worries. Have heard just the uncertainties make companies hesitate. Hope it's not inventory.

      As far as sandbagging, they have a history of consistently doing slightly above target. Has been acknowledged by them on IR calls.

    3. Thank you, much appreciated.

      It's going to be very difficult to sort out their "inventory" in the Bakken if the DAPL is shut down.

      Acquiring 130,000 net acres in the "oil-weighted Wyoming Powder River Basin is not trivial and one could read into that their concern about their remaining Bakken inventory.

      Personally I don't see that. My hunch: they got a great deal on those acres.

      Wow, so much could be said, but I will leave it at that for now.

  2. Take a good close look at clr 10 year chart. Not particularly inspiring

    1. I've been a "casual" investor since 1984. After almost forty years of "casual" investing and following the market about as much as I've followed anything, I can say with all honesty and all seriousness: I have never figured out investors and investing.

      CLR: back in March, 2020, about a year ago, you could have bought a 1,000 shares for $7,650 and today if you still had those shares, you could sell them for $24,290.

      But then, it would have been a whole lot better to buy TSLA last March.

      I honestly don't get it. But this is not an investment site. I follow the stock market and post the numbers because it puts things in perspective. When the earnings report for a company comes out and it seems like a lousy report, and yet the stock surges, I know I'm missing something.

      I can understand why amateurs invest in individual stocks: there is some thrill in investing -- kind of like the thrill compulsive gamblers must have when in Las Vegas. Putting all your chips on 22-black in roulette has to be some kind of thrill for some folks.

      But professional analysts / professional investors -- I have no clue. I guess Warren Buffett is the most interesting to follow and he, too, seems to have missed Bitcoin, TSLA, AAPL (until late in the game).

      I guess for me, the best part of investing, even when I lose, when I invest I have "skin in the game" and I follow it more closely.

      Example: mutual funds. Better, better, better returns but completely boring. I don't think I've looked at a mutual fund prospectus in a long time and yet my mutual fund IRAs have done very, very well.

      So, whether CLR is "inspiring" or not, it's in the eye of the beholder; and what interests an individual.

  3. No dak light sweet crude is at $49.03 this evening. Far cry from the $31 I got last month. Last least its headed in right direction.

  4. Yes, $49 might not seem like a lot to some folks but $49 is 58% more than $31. 1.58 * 31 = 49.

    For those who inherited minerals, it's nice to get $31/bbl, but it's wonderful to get $49/bbl. I don't know your circumstances but a lot of North Dakota mineral owners inherited their minerals.

    1. A reader wrote but I didn't want to post his comment as sent to me to maintain anonymity. The reader wrote, edited:

      Same here. Grandparents estate sold their grain lands but retained their minerals. Share with several cousins.

      At full production have seen that above $40 for every $10 price increase equals about $1000 in royalty check.

      And yes I have some distant family in [the Bakken] that as sole owners receive 20k per month when its over $50.