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Continental (CLR) Gains 4% on Q1 Earnings & Revenue Beat

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Continental Resources, Inc.’s (CLR - Free Report) shares have improved 4% since it reported strong first-quarterly earnings on Apr 28.  The strong quarterly results and reinstatement of dividend payment  had significant positive impacts on the price of the stock.

The company reported first-quarter 2021 adjusted earnings of 77 cents per share, beating the Zacks Consensus Estimate of 52 cents per share. Moreover, the bottom line improved substantially from a loss of 8 cents per share in the year-ago quarter.

Total quarterly revenues of $1,216 million surpassed the Zacks Consensus Estimate of $1,066 million. Also, the top line increased 38% from the year-ago figure of $881 million per share.

The strong quarterly results gained from higher realizations of commodity prices and lower operating expenses.

Continental Resources, Inc. Price, Consensus and EPS Surprise

 

Oil Production Declines

Production from continuing operations averaged 307,942 barrels of oil equivalent per day (Boe/d) for the reported quarter (49.3% oil) versus 360,841 Boe/d in the year-ago period. Production volumes declined primarily due to lower output from Bakken assets.

Oil production for the reported quarter was 151,852 barrels per day (Bbls/d), down from 200,671 Bbls/d a year ago. Moreover, natural gas production declined from 961,022 thousand cubic feet per day (Mcf/d) in first-quarter 2020 to 936,540 Mcf/d.

Crude Equivalent Price Realization Rises

Crude oil equivalent price for the reported quarter increased to $43.11 per barrel from $24.44 in the prior-year period. Moreover, natural gas was sold at $5.56 per Mcf, up from 90 cents in the year-ago quarter. Notably, average realized price for oil was $53.09 a barrel, up from $39.64 in the prior-year quarter.

Total Expenses Plunge

Total operating expenses of $810.1 million for the first quarter fell from $1,074.4 million in the March-end quarter of 2020. Total production costs fell to $93.1 million from $118.5 million in the year-ago quarter. Exploration costs for the reported quarter were $4.6 million compared with $11.6 million in the year-ago period. Transportation costs fell to $50.3 million from the year-ago level of $60.5 million.

Financials

For first-quarter 2021, total capital expenditure (excluding acquisitions) was $293.4 million. It generated free cash flow of $605.9 million in the reported quarter.

As of Mar 31, 2021, the company had total cash and cash equivalents of $96.1 million. It had long-term debt of $4,971.1 million (excluding current maturities). It had a debt to capitalization of 42.6%.

Dividend

The company’s board of directors reinstated the quarterly dividend payment. The new dividend of 11 cents per share more than doubled from the last payment. The amount will be paid out on May 24, 2021, to its stockholders of record as of May 10, 2021.

Outlook

For 2021, the company maintains its average oil production guidance at 160,000-165,000 barrels per day. Its natural gas production remains at 880,000-920,000 Mcf/d. Notably, the upstream player expects a capital spending of $1.4 billion for 2021.

Moreover, the company plans to generate $3.1 billion of cash flow from operations and $1.7 billion of free cash flow for 2021.

Zacks Rank & Other Stocks to Consider

Continental currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked players in the energy space are Marathon Petroleum Corporation (MPC - Free Report) , NATIONAL ENERGY (NESR - Free Report) and Hess Corporation (HES - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Marathon’s earnings for 2021 are expected to surge 381.3% year over year.

NATIONAL’s earnings for 2021 are expected to increase 52.6% year over year.

Hess’ bottom line for 2021 is expected to surge 96.5% year over year.

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