Continental Resources in the CLR

Posted by bakkenexpert

UPDATE: Although the numbers were solid, CLR sold off today and is down to around $55 a share which is less than expected 10x 2009 earnings. Beware as when BEXP and EOG report in the next day that even a good report may result in a selloff.

Continental Resources beat expectations by reporting a second-quarter profit of $127.3 million, or 75 cents a share this morning as revenue more than doubled to $303.4 million from $145.3 million. Production rose 11% to 31,623 barrels of oil a day with June topping 33000 barrels of oil a day which indicates acceleration in growth. Continental indicates it will deploy more drilling rigs in the second half. During the second quarter, Continental continued to expand its undeveloped acreage positions in the Bakken, Anadarko Woodford, Atoka, Rhinestreet, Marcellus, Huron and Haynesville shale plays. The Company has added approximately 325,000 net acres to its lease holdings since the beginning of 2008, increasing its acreage position to almost one million acres in U.S. shale resource plays.

In terms of Bakken production, average seven-day initial production rates continued to improve in the second quarter of 2008, with wells averaging 513 boepd, an increase of 13 percent over initial daily production for wells completed in the first quarter this year. Recent data in the North Dakota Bakken are shown below with average seven-day initial gross production rates with the Dodge and Mathistad wells performing quite nicely.

— Mathistad 1-35H (40% WI) in McKenzie Co. — 1,260 boepd;
— Dodge 1-17H (20% WI) McKenzie Co. — 989 boepd;
— Whitman 11-34H (32% WI) in Dunn Co. — 765 boepd;
— Bice 1-29H (44% WI) in Dunn Co. — 693 boepd;
— Cleo 1-12H (26% WI) McKenzie Co. — 654 boepd;
— Carson Peak 44-2H (33% WI) in Dunn Co. — 601 boepd;
— Kermit 1-32H (45% WI) McKenzie Co. — 596 boepd;
— Bridger 44-14H (45% WI) in Dunn Co. — 383 boepd;
— Bonneville 31-23H (45% WI) in Dunn Co. — 362 boepd;
— Mountain Gap 31-10H (44% WI) in Dunn Co. — 331 boepd.

The release indicates that CLR is on track for stellar growth for the next 12-18 months fueled by its Bakken plays. If oil stays above $120 per barrel, CLR is on track to post earnings over $4 in 2009 which would give the stock a forward PE of less than 16 at current prices. CLR may give back a little today amidst choppy trading, but long term the story is intact and this is a good entry point for a high powered growth stock.

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Morning Roundup – Fighting back

Posted by bakkenexpert

After a rough week for the Dow last week,  Oil has temporarily stabilized in the 140’s again which is propping up our Bakken plays.  In addition,  the 15%+ gain induced by the positive wells details issued by Continental Resources is holding up nicely increasing optimism for the sector.   It is encouraging that CLR isn’t attempting to fill the gap down to $70 and is attempting to form a base at $80.    Speculative play Northern Oil & Gas looks quite attractive to us here around $13.

ymbol	Last Trade		Change		Volume	Avg Vol (3m)
WLL	10:34AM ET	105.41	1.48	1.42%	127,626	1,070,060
MDU	10:32AM ET	34.11	0.09	0.26%	175,670	1,036,060
SM	10:33AM ET	58.89	1.46	2.54%	168,132	1,244,460
CLR	10:33AM ET	82.52	2.50	3.12%	279,830	1,726,880
EOG	10:33AM ET	120.17	1.61	1.36%	487,726	3,215,470
NOG	10:33AM ET	13.08	0.08	0.59%	52,427	599,400
KOG	10:34AM ET	4.02	0.01	0.25%	184,995	1,569,670
KDKN.OB	10:33AM ET	2.06	0.00	0.00%	17,744	244,559
BSIC.OB	9:56AM ET	1.95	0.07	3.47%	7,600	95,853.1
XTO	10:33AM ET	61.49	1.24	2.06%	938,319	7,393,360

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