Continental Resources cost cuts failed to offset oil price slump
By Ernest Scheyder
May 4 (Reuters) – Continental Resources Inc, the oil producer founded by legendary wildcatter Harold Hamm, reported a larger-than-expected first-quarter loss on Wednesday as cost cuts failed to offset falling crude prices.
The company, once the largest oil producer in North Dakota’s Bakken shale formation, has focused most of its budget in recent quarters on shale formations in Oklahoma, where some new wells have produced prolific quantities of oil.
Overall production rose during the first quarter, leading Continental to boost its forecast for full-year output by 10,000 barrels of oil equivalent per day (boe/d).
Continental, which does not hedge oil production, said it expects commodity prices to rise after low levels that have crippled the energy industry.
“We are managing production volumes for higher oil and natural gas prices that we expect in second half 2016,” Hamm, the company’s chief executive, said in a statement.
Continental posted a quarterly net loss of $198.3 million, or 54 cents per share, compared with a loss of $132 million, or 36 cents per share, in the year-ago period.
Excluding one-time items, Continental lost 41 cents per share. Analysts’ consensus estimate was a loss of 37 cents, according to Thomson Reuters I/B/E/S.
Continental’s oil sold for $25.72 per barrel, down 33 percent from the year-ago quarter. Production costs also fell, by 26 percent to $3.76 per barrel, though overall production rose 12 percent to 230,802 barrels of oil equivalent per day (boe/d).
Continental said it sold acreage in Wyoming for $110 million in April and will use the funds to reduce debt.
Shares of Continental fell 3 percent to close at $34.85.
The company has scheduled a conference call on Thursday morning with investors to discuss the quarterly results. (Reporting by Ernest Scheyder; Editing by Richard Chang)