Continental Resources

Continental Resources’s CEO said the company was limiting production growth and warned of oversupply

Continental Resources CEO: “We will maintain our capital discipline, and we project generating flat to 5% annual production growth over the next 5 years.”“WILLIAM B. BERRY, CEO & DIRECTOR, CONTINENTAL RESOURCES, INC: First, we are committed to expanding return of capital to shareholders and continuing to deliver industry and S&P 500 competitive ROCE. In 2021, we delivered record free cash flow and a 14.6% ROCE, which is significantly above the S&P 500 average. In 2022, we are positioning ourselves to deliver another exceptional year with a projected 21% return on capital employed. Our highly accretive acquisitions are further expanding our high-quality inventory and continues to deliver what our investors want: geologic and geographic diversity and commodity optionality that makes our company both competitive and unique. We will maintain our capital discipline, and we project generating flat to 5% annual production growth over the next 5 years, as we have previously noted.” (Continental Resources Q4 2021 Earnings Call, 2/15/2022)

Continental Resources CEO: “we don’t see any reason for anybody to be able to produce in an oversupplied market… you’re still seeing that there is excess production capacity that’s out there.” “WILLIAM B. BERRY: Yes, I think in the past, Nitin, if you look at what the comments we’ve made in this respect is that we don’t see any reason for anybody to be able to produce in an oversupplied market. And historically, that’s been the case, and you’re still seeing that there is excess production capacity that’s out there. I know we’re all trying to understand what’s happening with Russia and what it’s up to. There’s been a bit of a war premium in there that maybe has driven the price up a little bit. That’s not good for the world. It’s not good for the industry. But that is something that we look at continuously, what’s the right approach. And you see us move from commodity to commodity, oil versus gas, and sometimes we’ll move it back and forth as far as a BOE reduction basis. But we’re real comfortable in that 0% to 5% range. That’s probably the appropriate range for us to be looking at long term.” (Continental Resources Q4 2021 Earnings Call, 2/15/2022)

Continental Resources said their production growth plan was based on $35 a barrel oil.“JACK H. STARK, PRESIDENT, CONTINENTAL RESOURCES, INC.: Our recent expansion into the oil-weighted Permian and Powder River Basin has increased our geologic and geographic diversity of our portfolio, adding over 2,000 net undeveloped locations and over 1.5 billion barrels of net resource potential to our already robust inventory. As it stands today, our existing inventory can grow our production at 5% per year for the next 10 years at an average cost of supply of $35 per barrel. This is approximately $5 lower than our average cost of supply 3 years ago, which demonstrates the operating and capital efficiencies our teams have achieved and the increasing performance of our inventory. (Continental Resources Q4 2021 Earnings Call, 2/15/2022)