After shutting in oil volumes in the second quarter of 2020, Oklahoma City’s Continental Resources still reported a net loss of $239.3 million or 66 cents a diluted share.
The company’s earnings report, released Monday showed an adjusted net loss for the quarter was $255.7 million or 71-cents a share. Revenue for the quarter was $175.66 million, down nearly 86% from a year ago.
“Continental has proactively responded to the unprecedented events that have shaped the global commodity landscape in 2020. By deferring volumes in the second quarter of 2020, we expect to generate an estimated $90 million in incremental cash flow from operations at $40 WTI. Combined with our strong asset position and unmatched shareholder alignment, we believe Continental’s equity reflects an uncommon value,” said Bill Berry, Chief Executive Officer.
Continental curtailed nearly 55% of its 7.8 MMBo oil volumes in the quarter due to the COVID-19 pandemic resulting in an average daily production for the quarter of 202,815 Boepd.
But the company anticipates increasing its daily production to an expected third quarter result of 300,000 barrels of oil equivalent per day. It is also forecasting approximately $1.3 billion annual cash flow from its operations and $200 million annual free cash flow in 2020 at $40 West Texas Intermediate.
John Hart, Chief Financial Officer said,”While our debt increased modestly due to the pandemic, it has not changed our long-term strategy to continue focusing on debt reduction, with a total debt target of $5.4 billion to $5.5 billion by year end 2020.”
Much of the company’s operations in the Bakken formation of North Dakota was curtailed and as a result, the company’s well cost in the region dropped 12% to $7.2 million per well.
The Company is on track to achieve its previously revised 2020 Capex guidance of $1.2 billion or lower, a 55% decrease from original guidance of $2.65 billion. The Company continues to drive maintenance capital lower and estimates $1.2 billion D&C maintenance capital or lower to hold production flat year-over-year in 2021.
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