Continental Resources, Inc. : Continental Resources Posts 1Q Profit As Hedging Losses Ease
05/02/2012| 06:49pm US/Eastern
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Continental Resources Inc. (CLR) swung to a first-quarter profit as losses on derivatives lessened and production soared.
Shares still slipped 2.1% at $88.45 in light after-hours trading--despite a stronger-than-expected core profit--as the company said it is boosting its 2012 capital expenditure budget to $2.3 billion, excluding acquisitions, to develop recently acquired acreage and to accelerate drilling. The stock has climbed 35% this year through Wednesday's close, outperforming the broader market.
Continental has generated surging revenue over the past year as new wells in North Dakota and Oklahoma boosted its production. The company has also benefited from higher prices for oil, which accounts for most of its output, though losses from hedging activities have sometimes stung its bottom line.
The oil-and-gas producer recently paid $340 million to buy more assets in the Bakken Shale region from Wheatland Oil Inc., which is majority-owned by a trust of which Continental Chairman and Chief Executive Harold Hamm is the sole trustee.
Continental posted a profit of $69.1 million, or 38 cents a share, compared with a year-ago loss of $137.2 million, or 80 cents a share. Excluding the effects of losses on derivatives, write-downs and other items, per-share earnings rose to 76 cents from 53 cents.
Oil-and-gas revenue, excluding sales to affiliates, jumped 69% to $535.3 million.
Analysts polled by Thomson Reuters were expecting an 85-cents-per-share profit with $549 million of oil-and-gas sales.
Average daily oil output climbed 56% as prices increased 6.1%. Production of natural gas surged 94%, while prices slumped 12%.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com
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