The second quarter was so strong for Oklahoma City’s Continental Resources, the energy company described it as “outstanding” along with “robust cash flow” and “exceptional shareholder value.”
The company reported net income of $289.3 million or 79 cents a diluted share for the quarter that ended June 30. Adjusted net income was $332.8 million or 91 cents a diluted share. Net cash from operating activities was $672.8 million.
The quarter was strong enough that Continental leadership projects $3.8 billion in full-year 2021 cash flow from operations. The company as a result also declared a 15-cent a share quarterly dividend which represented a 4-cent increase.
In addition, Continental’s leaders decided to resume the firm’s share repurchase program of $1 billion which began in the second quarter 2019. With $317 million of share repurchases previously executed, $683 million of share repurchase capacity remains available.
Continental also decided to accelerate its net debt reduction and is targeting $4.7 billion of project total debt by the end of 2021 and $3.7 billion of projected net debt by end. The company has managed to reduce its total debt to $4.74 billion with a cash balance of $150 million which translate to net debt of $4.59 billion as of the end of June.
“Continental is delivering strong asset performance in addition to capital and operational efficiency gains that are driving robust cash flow generation and exceptional shareholder value,” said Bill Berry, Chief Executive Officer. “The $0.04 increase to our quarterly fixed dividend and resumption of our $1.0 billion share repurchase program underscores our commitment to delivering peer leading shareholder capital return.”
Second quarter 2021 total production averaged 338.7 MBoepd. Second quarter 2021 oil production averaged 166.8 MBopd. Second quarter 2021 natural gas production averaged 1,031.6 MMcfpd.
Due to continued outperformance, the Company is improving various 2021 guidance metrics and differentials. The Company has increased its 2021 annual natural gas production guidance to 900 to 1,000 MMcfpd. Production expense is projected to be improved to $3.00 to $3.50 per Boe in 2021.
Production tax rate is projected to be improved to 7.3% to 7.6% in 2021. Continental projects 2021 guidance for DD&A of $15.00 to $17.00 per Boe, reflecting strong well productivity, capital efficiency and improved commodity prices. The Company’s second half 2021 crude oil differentials guidance per barrel of oil is projected to average ($3.50) to ($4.25) and the Company’s second half 2021 natural gas differentials guidance per Mcf is projected to average a premium of $0.25 to $0.75.
The Company plans to host a conference call to discuss second quarter 2021 results on Tuesday, August 3, 2021 at 12:00 p.m. ET (11:00 a.m. CT).
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