Continental Resources Inc. expects to reach the high end of its free cash flow range while increasing production in the second half of 2019, a company official said Aug. 6.
CEO Harold Hamm said the company is "very committed" to meeting its capital expenditures and corporate guidance for the year, adding that Continental has significant flexibility going into the final six months of the year. Part of that flexibility, Hamm said, is free cash flow that will come in at the higher end of the previously announced $500 million to $600 million range for 2019. The free cash flow has allowed Continental to repurchase $92 million worth of stock so far this year.
"We do not think our current share price is a fair indicator of the value of our company and we are determined to capture value for our shareholders," Hamm said.
Continental reported total production of 331,414 barrels of oil equivalent for the second quarter, up nearly 50,000 boe/d from the second quarter of 2018. The company increased its annual oil production guidance to between 195,000 barrels per day and 200,000 bbl/d while increasing its gas production guidance to between 820 MMcf/d and 840 MMcf/d. President Jack Stark said Continental's production was up 23% in the Bakken Shale year over year while oil production from its Oklahoma holdings, including the SCOOP and STACK plays, is up 35%.
"Our crude oil production growth is running ahead of schedule and we expect average production for the year to be in the upper half of our original guidance," Hamm said. "We have also achieved efficiencies throughout the first half of 2019 that will allow the reduction of drilling rigs from 19 rigs in SCOOP/STACK to 12 rigs in the early fourth quarter [of] 2019."
Stark said Continental's Project SpringBoard, which focuses on increasing oil production in the SCOOP and STACK, is proceeding as anticipated.
"We fully expect to meet or exceed our updated target of 18,000 barrels of oil per day in the third quarter. For the fourth quarter, we are targeting 22,000 barrels of oil per day and are well on our way to achieving this since July production averaged approximately 19,000 barrels of oil per day," he said.
For the quarter, Continental reported adjusted net income of $219.1 million, of 59 cents per share. That was two cents below the S&P Global Market Intelligence consensus earnings estimate for the quarter and 14 cents less than the company's profit in the second quarter of 2018.
Continental's net income totaled $236.6 million, compared to $242.5 million in the second quarter of last year. Total revenues were $1.21 billion, up $700 million from the same quarter in 2018.