Current CLR Stock Info

“We bought one shale and got another one for free.”

Continental Resources (ticker: CLR), the nation’s eighth-largest E&P based on market capitalization, held its 2014 Analyst Day today in Oklahoma City, its first since 2012.

The Springer Shale is Unveiled

At the Analyst Day, Will Parker, Senior Exploration Geologist, said CLR published a list of six stealth plays in 2012. “Using our expertise, we have turned a stealth play into a reality,” he said.

Source: CLR 2014 Analyst Day Presentation

Continental’s find is the Springer ...

Analyst Commentary

KLR Group Note (9/18/14)

CLR ($75.82, A, $92) – Analyst Day: Updates ’14 Production Growth/CAPEX Guidance, Provides ’15 Guidance, Portfolio Capital Productivity In Line, Springer Shale Competitive with Bakken/SCOOP Condensate – Continental provided highlights of its investor day presentation yesterday. The company narrowed ’14 production growth guidance from 26%-32% to 27%-30% and expects ’15 production growth of 26%-32%. Continental also raised its ’14 capex estimate from ~$4.05 billion to ~$4.55 billion and expects ’15 capex of ~$5.2 billion. Preliminarily, we expect ’14 and ’15 production growth to be at the midpoint of guidance. The company also announced a new exploration discovery in the SCOOP, the Springer Shale. Continental plans to accelerate activity in the Springer Shale to eight rigs for the remainder of the year. Initial Springer oil wells (~4,500’ laterals) average ~700 Boepd the first 30 days and should recover ~900 Mboe (~65% oil, ~20% gas, ~15% NGLs) for a cost of ~$9.7 million (~40% IRR). Bakken wells utilizing increased proppant and hybrid slickwater/gel fracs should recover ~750 Mboe (~85% oil) for a cost of ~$10 million (~40% IRR). The company estimates ultimate development of its Williston Basin acreage contemplates 160-acre spacing in the Middle Bakken and TFS first bench and 320-acre spacing in the TFS second bench. SCOOP condensate wells should recover ~1,725 Mboe (~25% oil; 35%-40% IRR). SCOOP oil wells should recover ~660 Mboe (~50% oil; 10%-15% IRR). Medium reach SCOOP wells (~7,500’ laterals) cost $12+ million. This announcement should have a positive value impact due to an almost ~10% (~$400 million) increase per annum in capital spending (capital productivity unchanged).  

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