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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Continental Resources Inc | NYSE:CLR | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 74.27 | 0 | 01:00:00 |
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Oklahoma
|
|
73-0767549
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
20 N. Broadway, Oklahoma City, Oklahoma
|
|
73102
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|
|
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
•
|
our strategy;
|
•
|
our business and financial plans;
|
•
|
our future operations;
|
•
|
our crude oil and natural gas reserves and related development plans;
|
•
|
technology;
|
•
|
future crude oil, natural gas liquids, and natural gas prices and differentials;
|
•
|
the timing and amount of future production of crude oil and natural gas and flaring activities;
|
•
|
the amount, nature and timing of capital expenditures;
|
•
|
estimated revenues, expenses and results of operations;
|
•
|
drilling and completing of wells;
|
•
|
competition;
|
•
|
marketing of crude oil and natural gas;
|
•
|
transportation of crude oil, natural gas liquids, and natural gas to markets;
|
•
|
property exploitation, property acquisitions and dispositions, or joint development opportunities;
|
•
|
costs of exploiting and developing our properties and conducting other operations;
|
•
|
our financial position;
|
•
|
general economic conditions;
|
•
|
credit markets;
|
•
|
our liquidity and access to capital;
|
•
|
the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving us and of scheduled or potential regulatory or legal changes;
|
•
|
our future operating and financial results;
|
•
|
our future commodity or other hedging arrangements; and
|
•
|
the ability and willingness of current or potential lenders, hedging contract counterparties, customers, and working interest owners to fulfill their obligations to us or to enter into transactions with us in the future on terms that are acceptable to us.
|
ITEM 1.
|
Financial Statements
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
In thousands, except par values and share data
|
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
12,896
|
|
|
$
|
43,902
|
|
Receivables:
|
|
|
|
|
||||
Crude oil and natural gas sales
|
|
794,447
|
|
|
671,665
|
|
||
Affiliated parties
|
|
126
|
|
|
63
|
|
||
Joint interest and other, net
|
|
442,779
|
|
|
426,585
|
|
||
Derivative assets
|
|
—
|
|
|
2,603
|
|
||
Inventories
|
|
104,230
|
|
|
97,406
|
|
||
Prepaid expenses and other
|
|
14,659
|
|
|
9,501
|
|
||
Total current assets
|
|
1,369,137
|
|
|
1,251,725
|
|
||
Net property and equipment, based on successful efforts method of accounting
|
|
13,644,538
|
|
|
12,933,789
|
|
||
Other noncurrent assets
|
|
17,385
|
|
|
14,137
|
|
||
Total assets
|
|
$
|
15,031,060
|
|
|
$
|
14,199,651
|
|
|
|
|
|
|
||||
Liabilities and shareholders’ equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable trade
|
|
$
|
771,425
|
|
|
$
|
692,908
|
|
Revenues and royalties payable
|
|
462,082
|
|
|
374,831
|
|
||
Payables to affiliated parties
|
|
316
|
|
|
143
|
|
||
Accrued liabilities and other
|
|
245,229
|
|
|
260,074
|
|
||
Derivative liabilities
|
|
9,056
|
|
|
—
|
|
||
Current portion of long-term debt
|
|
2,341
|
|
|
2,286
|
|
||
Total current liabilities
|
|
1,490,449
|
|
|
1,330,242
|
|
||
Long-term debt, net of current portion
|
|
5,955,326
|
|
|
6,351,405
|
|
||
Other noncurrent liabilities:
|
|
|
|
|
||||
Deferred income tax liabilities, net
|
|
1,511,569
|
|
|
1,259,558
|
|
||
Asset retirement obligations, net of current portion
|
|
122,532
|
|
|
111,794
|
|
||
Noncurrent derivative liabilities
|
|
354
|
|
|
—
|
|
||
Other noncurrent liabilities
|
|
12,020
|
|
|
15,449
|
|
||
Total other noncurrent liabilities
|
|
1,646,475
|
|
|
1,386,801
|
|
||
Commitments and contingencies (Note 8)
|
|
|
|
|
|
|||
Shareholders’ equity:
|
|
|
|
|
||||
Preferred stock, $0.01 par value; 25,000,000 shares authorized; no shares issued and outstanding
|
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; 1,000,000,000 shares authorized; 375,995,294 shares issued and outstanding at September 30, 2018; 375,219,769 shares issued and outstanding at December 31, 2017
|
|
3,760
|
|
|
3,752
|
|
||
Additional paid-in capital
|
|
1,426,222
|
|
|
1,409,326
|
|
||
Accumulated other comprehensive income
|
|
430
|
|
|
307
|
|
||
Retained earnings
|
|
4,508,398
|
|
|
3,717,818
|
|
||
Total shareholders’ equity
|
|
5,938,810
|
|
|
5,131,203
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
15,031,060
|
|
|
$
|
14,199,651
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
In thousands, except per share data
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Crude oil and natural gas sales
|
|
$
|
1,273,238
|
|
|
$
|
704,818
|
|
|
$
|
3,524,618
|
|
|
$
|
1,965,216
|
|
Gain (loss) on natural gas derivatives, net
|
|
(2,025
|
)
|
|
8,602
|
|
|
(4,536
|
)
|
|
83,482
|
|
||||
Crude oil and natural gas service operations
|
|
10,938
|
|
|
13,323
|
|
|
40,210
|
|
|
24,959
|
|
||||
Total revenues
|
|
1,282,151
|
|
|
726,743
|
|
|
3,560,292
|
|
|
2,073,657
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Production expenses
|
|
103,032
|
|
|
84,514
|
|
|
286,165
|
|
|
239,842
|
|
||||
Production taxes
|
|
98,572
|
|
|
51,264
|
|
|
262,747
|
|
|
134,462
|
|
||||
Transportation expenses
|
|
46,008
|
|
|
—
|
|
|
142,559
|
|
|
—
|
|
||||
Exploration expenses
|
|
2,324
|
|
|
1,389
|
|
|
4,347
|
|
|
9,591
|
|
||||
Crude oil and natural gas service operations
|
|
5,163
|
|
|
3,349
|
|
|
17,434
|
|
|
10,664
|
|
||||
Depreciation, depletion, amortization and accretion
|
|
469,333
|
|
|
420,243
|
|
|
1,370,912
|
|
|
1,198,169
|
|
||||
Property impairments
|
|
23,770
|
|
|
35,130
|
|
|
86,715
|
|
|
209,819
|
|
||||
General and administrative expenses
|
|
44,151
|
|
|
44,006
|
|
|
134,368
|
|
|
130,413
|
|
||||
Net (gain) loss on sale of assets and other
|
|
(1,510
|
)
|
|
(4,905
|
)
|
|
(8,261
|
)
|
|
764
|
|
||||
Total operating costs and expenses
|
|
790,843
|
|
|
634,990
|
|
|
2,296,986
|
|
|
1,933,724
|
|
||||
Income from operations
|
|
491,308
|
|
|
91,753
|
|
|
1,263,306
|
|
|
139,933
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
(73,409
|
)
|
|
(74,756
|
)
|
|
(223,590
|
)
|
|
(218,672
|
)
|
||||
Loss on extinguishment of debt
|
|
(7,133
|
)
|
|
—
|
|
|
(7,133
|
)
|
|
—
|
|
||||
Other
|
|
869
|
|
|
394
|
|
|
2,231
|
|
|
1,209
|
|
||||
|
|
(79,673
|
)
|
|
(74,362
|
)
|
|
(228,492
|
)
|
|
(217,463
|
)
|
||||
Income (loss) before income taxes
|
|
411,635
|
|
|
17,391
|
|
|
1,034,814
|
|
|
(77,530
|
)
|
||||
(Provision) benefit for income taxes
|
|
(97,466
|
)
|
|
(6,770
|
)
|
|
(244,234
|
)
|
|
25,063
|
|
||||
Net income (loss)
|
|
$
|
314,169
|
|
|
$
|
10,621
|
|
|
$
|
790,580
|
|
|
$
|
(52,467
|
)
|
Basic net income (loss) per share
|
|
$
|
0.84
|
|
|
$
|
0.03
|
|
|
$
|
2.13
|
|
|
$
|
(0.14
|
)
|
Diluted net income (loss) per share
|
|
$
|
0.84
|
|
|
$
|
0.03
|
|
|
$
|
2.11
|
|
|
$
|
(0.14
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
314,169
|
|
|
$
|
10,621
|
|
|
$
|
790,580
|
|
|
$
|
(52,467
|
)
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
|
105
|
|
|
202
|
|
|
123
|
|
|
529
|
|
||||
Total other comprehensive income, net of tax
|
|
105
|
|
|
202
|
|
|
123
|
|
|
529
|
|
||||
Comprehensive income (loss)
|
|
$
|
314,274
|
|
|
$
|
10,823
|
|
|
$
|
790,703
|
|
|
$
|
(51,938
|
)
|
In thousands, except share data
|
|
Shares
outstanding |
|
Common
stock |
|
Additional
paid-in capital |
|
Accumulated
other comprehensive income |
|
Retained
earnings |
|
Total
shareholders’ equity |
|||||||||||
Balance at December 31, 2017
|
|
375,219,769
|
|
|
$
|
3,752
|
|
|
$
|
1,409,326
|
|
|
$
|
307
|
|
|
$
|
3,717,818
|
|
|
$
|
5,131,203
|
|
Net income (unaudited)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
790,580
|
|
|
790,580
|
|
|||||
Other comprehensive income, net of tax (unaudited)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
123
|
|
|
—
|
|
|
123
|
|
|||||
Stock-based compensation (unaudited)
|
|
—
|
|
|
—
|
|
|
33,196
|
|
|
—
|
|
|
—
|
|
|
33,196
|
|
|||||
Restricted stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Granted (unaudited)
|
|
1,332,705
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|||||
Repurchased and canceled (unaudited)
|
|
(298,648
|
)
|
|
(3
|
)
|
|
(16,300
|
)
|
|
—
|
|
|
—
|
|
|
(16,303
|
)
|
|||||
Forfeited (unaudited)
|
|
(258,532
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Balance at September 30, 2018 (unaudited)
|
|
375,995,294
|
|
|
$
|
3,760
|
|
|
$
|
1,426,222
|
|
|
$
|
430
|
|
|
$
|
4,508,398
|
|
|
$
|
5,938,810
|
|
|
|
Nine months ended September 30,
|
||||||
In thousands
|
|
2018
|
|
2017
|
||||
Cash flows from operating activities
|
|
|
||||||
Net income (loss)
|
|
$
|
790,580
|
|
|
$
|
(52,467
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation, depletion, amortization and accretion
|
|
1,370,676
|
|
|
1,199,715
|
|
||
Property impairments
|
|
86,715
|
|
|
209,819
|
|
||
Non-cash (gain) loss on derivatives, net
|
|
12,013
|
|
|
(65,481
|
)
|
||
Stock-based compensation
|
|
33,209
|
|
|
32,490
|
|
||
Provision (benefit) for deferred income taxes
|
|
252,012
|
|
|
(25,063
|
)
|
||
Dry hole costs
|
|
1
|
|
|
157
|
|
||
Gain on sale of assets, net
|
|
(8,261
|
)
|
|
(703
|
)
|
||
Loss on extinguishment of debt
|
|
7,133
|
|
|
—
|
|
||
Other, net
|
|
11,068
|
|
|
7,705
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
(139,219
|
)
|
|
(154,790
|
)
|
||
Inventories
|
|
(7,852
|
)
|
|
6,736
|
|
||
Other current assets
|
|
(4,766
|
)
|
|
729
|
|
||
Accounts payable trade
|
|
32,708
|
|
|
128,337
|
|
||
Revenues and royalties payable
|
|
86,814
|
|
|
48,447
|
|
||
Accrued liabilities and other
|
|
(19,677
|
)
|
|
13,050
|
|
||
Other noncurrent assets and liabilities
|
|
(2,413
|
)
|
|
(700
|
)
|
||
Net cash provided by operating activities
|
|
2,500,741
|
|
|
1,347,981
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
||||
Exploration and development
|
|
(2,093,010
|
)
|
|
(1,444,991
|
)
|
||
Purchase of producing crude oil and natural gas properties
|
|
(25,476
|
)
|
|
(3,480
|
)
|
||
Purchase of other property and equipment
|
|
(15,724
|
)
|
|
(10,508
|
)
|
||
Proceeds from sale of assets
|
|
30,727
|
|
|
84,725
|
|
||
Net cash used in investing activities
|
|
(2,103,483
|
)
|
|
(1,374,254
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
||||
Credit facility borrowings
|
|
1,706,000
|
|
|
985,000
|
|
||
Repayment of credit facility
|
|
(1,704,000
|
)
|
|
(952,000
|
)
|
||
Redemption of Senior Notes
|
|
(400,000
|
)
|
|
—
|
|
||
Premium and costs on redemption of Senior Notes
|
|
(6,700
|
)
|
|
—
|
|
||
Repayment of other debt
|
|
(1,707
|
)
|
|
(1,654
|
)
|
||
Debt issuance costs
|
|
(5,543
|
)
|
|
—
|
|
||
Repurchase of restricted stock for tax withholdings
|
|
(16,303
|
)
|
|
(10,985
|
)
|
||
Net cash (used in) provided by financing activities
|
|
(428,253
|
)
|
|
20,361
|
|
||
Effect of exchange rate changes on cash
|
|
(11
|
)
|
|
34
|
|
||
Net change in cash and cash equivalents
|
|
(31,006
|
)
|
|
(5,878
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
43,902
|
|
|
16,643
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
12,896
|
|
|
$
|
10,765
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
In thousands, except per share data
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income (loss) (numerator)
|
|
$
|
314,169
|
|
|
$
|
10,621
|
|
|
$
|
790,580
|
|
|
$
|
(52,467
|
)
|
Weighted average shares (denominator):
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares - basic
|
|
371,960
|
|
|
371,142
|
|
|
371,810
|
|
|
371,029
|
|
||||
Non-vested restricted stock (1)
|
|
2,663
|
|
|
1,873
|
|
|
2,952
|
|
|
—
|
|
||||
Weighted average shares - diluted
|
|
374,623
|
|
|
373,015
|
|
|
374,762
|
|
|
371,029
|
|
||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.84
|
|
|
$
|
0.03
|
|
|
$
|
2.13
|
|
|
$
|
(0.14
|
)
|
Diluted
|
|
$
|
0.84
|
|
|
$
|
0.03
|
|
|
$
|
2.11
|
|
|
$
|
(0.14
|
)
|
(1)
|
For the nine months ended
September 30, 2017
, the Company had a net loss and therefore the potential dilutive effect of approximately
2,558,900
weighted average non-vested restricted shares were not included in the calculation of diluted net loss per share because to do so would have been anti-dilutive to the computation.
|
In thousands
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Tubular goods and equipment
|
|
$
|
15,829
|
|
|
$
|
14,946
|
|
Crude oil
|
|
88,401
|
|
|
82,460
|
|
||
Total
|
|
$
|
104,230
|
|
|
$
|
97,406
|
|
|
|
Nine months ended September 30,
|
||||||
In thousands
|
|
2018
|
|
2017
|
||||
Supplemental cash flow information:
|
|
|
|
|
||||
Cash paid for interest
|
|
$
|
199,960
|
|
|
$
|
198,405
|
|
Cash paid for income taxes
|
|
—
|
|
|
2
|
|
||
Cash received for income tax refunds
|
|
7,786
|
|
|
148
|
|
||
Non-cash investing activities:
|
|
|
|
|
||||
Asset retirement obligation additions and revisions, net
|
|
6,591
|
|
|
5,111
|
|
|
|
Three months ended September 30, 2018
|
|
Nine months ended September 30, 2018
|
||||||||||||||||||||
In thousands
|
|
New Standard
|
|
Prior Presentation
|
|
Change
|
|
New Standard
|
|
Prior Presentation
|
|
Change
|
||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Crude oil and natural gas sales
|
|
$
|
1,273,238
|
|
|
$
|
1,227,230
|
|
|
$
|
46,008
|
|
|
$
|
3,524,618
|
|
|
$
|
3,382,059
|
|
|
$
|
142,559
|
|
Loss on natural gas derivatives, net
|
|
(2,025
|
)
|
|
(2,025
|
)
|
|
—
|
|
|
(4,536
|
)
|
|
(4,536
|
)
|
|
—
|
|
||||||
Crude oil and natural gas service operations
|
|
10,938
|
|
|
10,938
|
|
|
—
|
|
|
40,210
|
|
|
40,210
|
|
|
—
|
|
||||||
Total revenues
|
|
$
|
1,282,151
|
|
|
$
|
1,236,143
|
|
|
$
|
46,008
|
|
|
$
|
3,560,292
|
|
|
$
|
3,417,733
|
|
|
$
|
142,559
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Transportation expenses
|
|
$
|
46,008
|
|
|
$
|
—
|
|
|
$
|
46,008
|
|
|
$
|
142,559
|
|
|
$
|
—
|
|
|
$
|
142,559
|
|
Net income
|
|
$
|
314,169
|
|
|
$
|
314,169
|
|
|
$
|
—
|
|
|
$
|
790,580
|
|
|
$
|
790,580
|
|
|
$
|
—
|
|
|
|
Three months ended September 30, 2018
|
|
Nine months ended September 30, 2018
|
||||||||||||||||||||
In thousands
|
|
North Region
|
|
South Region
|
|
Total
|
|
North Region
|
|
South Region
|
|
Total
|
||||||||||||
Crude oil revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operated properties
|
|
$
|
634,251
|
|
|
$
|
159,506
|
|
|
$
|
793,757
|
|
|
$
|
1,791,045
|
|
|
$
|
443,562
|
|
|
$
|
2,234,607
|
|
Non-operated properties
|
|
225,513
|
|
|
19,288
|
|
|
244,801
|
|
|
604,700
|
|
|
52,415
|
|
|
657,115
|
|
||||||
Total crude oil revenues
|
|
859,764
|
|
|
178,794
|
|
|
1,038,558
|
|
|
2,395,745
|
|
|
495,977
|
|
|
2,891,722
|
|
||||||
Natural gas revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operated properties
|
|
60,381
|
|
|
140,168
|
|
|
200,549
|
|
|
153,627
|
|
|
388,610
|
|
|
542,237
|
|
||||||
Non-operated properties
|
|
16,397
|
|
|
17,734
|
|
|
34,131
|
|
|
44,058
|
|
|
46,601
|
|
|
90,659
|
|
||||||
Total natural gas revenues
|
|
76,778
|
|
|
157,902
|
|
|
234,680
|
|
|
197,685
|
|
|
435,211
|
|
|
632,896
|
|
||||||
Crude oil and natural gas sales
|
|
$
|
936,542
|
|
|
$
|
336,696
|
|
|
$
|
1,273,238
|
|
|
$
|
2,593,430
|
|
|
$
|
931,188
|
|
|
$
|
3,524,618
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Timing of revenue recognition
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goods transferred at a point in time
|
|
$
|
936,542
|
|
|
$
|
336,696
|
|
|
$
|
1,273,238
|
|
|
$
|
2,593,430
|
|
|
$
|
931,188
|
|
|
$
|
3,524,618
|
|
Goods transferred over time
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
$
|
936,542
|
|
|
$
|
336,696
|
|
|
$
|
1,273,238
|
|
|
$
|
2,593,430
|
|
|
$
|
931,188
|
|
|
$
|
3,524,618
|
|
|
|
|
|
Swaps Weighted Average Price
|
|||
Period and Type of Contract
|
|
MMBtus
|
|
||||
October 2018 - December 2018
|
|
|
|
|
|||
Swaps - Henry Hub
|
|
57,960,000
|
|
|
$
|
2.88
|
|
April 2019 - December 2019
|
|
|
|
|
|||
Swaps - Henry Hub
|
|
14,850,000
|
|
|
$
|
2.68
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
In thousands
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Cash received (paid) on derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Natural gas fixed price swaps
|
|
$
|
(1,477
|
)
|
|
$
|
12,893
|
|
|
$
|
7,477
|
|
|
$
|
25,080
|
|
Natural gas collars
|
|
—
|
|
|
(612
|
)
|
|
—
|
|
|
(10,068
|
)
|
||||
Cash received (paid) on derivatives, net
|
|
(1,477
|
)
|
|
12,281
|
|
|
7,477
|
|
|
15,012
|
|
||||
Non-cash gain (loss) on derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Natural gas fixed price swaps
|
|
(548
|
)
|
|
(8,026
|
)
|
|
(12,013
|
)
|
|
27,390
|
|
||||
Natural gas collars
|
|
—
|
|
|
4,347
|
|
|
—
|
|
|
41,080
|
|
||||
Non-cash gain (loss) on derivatives, net
|
|
(548
|
)
|
|
(3,679
|
)
|
|
(12,013
|
)
|
|
68,470
|
|
||||
Gain (loss) on natural gas derivatives, net
|
|
$
|
(2,025
|
)
|
|
$
|
8,602
|
|
|
$
|
(4,536
|
)
|
|
$
|
83,482
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
In thousands
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Cash received on diesel fuel derivatives
|
|
$
|
—
|
|
|
$
|
603
|
|
|
$
|
—
|
|
|
$
|
1,522
|
|
Non-cash gain (loss) on diesel fuel derivatives
|
|
—
|
|
|
740
|
|
|
—
|
|
|
(2,989
|
)
|
||||
Gain (loss) on diesel fuel derivatives, net
|
|
$
|
—
|
|
|
$
|
1,343
|
|
|
$
|
—
|
|
|
$
|
(1,467
|
)
|
In thousands
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Commodity derivative assets:
|
|
|
|
|
||||
Gross amounts of recognized assets
|
|
$
|
276
|
|
|
$
|
2,603
|
|
Gross amounts offset on balance sheet
|
|
(276
|
)
|
|
—
|
|
||
Net amounts of assets on balance sheet
|
|
—
|
|
|
2,603
|
|
||
Commodity derivative liabilities:
|
|
|
|
|
||||
Gross amounts of recognized liabilities
|
|
(9,686
|
)
|
|
—
|
|
||
Gross amounts offset on balance sheet
|
|
276
|
|
|
—
|
|
||
Net amounts of liabilities on balance sheet
|
|
$
|
(9,410
|
)
|
|
$
|
—
|
|
In thousands
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Derivative assets
|
|
$
|
—
|
|
|
$
|
2,603
|
|
Noncurrent derivative assets
|
|
—
|
|
|
—
|
|
||
Net amounts of assets on balance sheet
|
|
—
|
|
|
2,603
|
|
||
Derivative liabilities
|
|
(9,056
|
)
|
|
—
|
|
||
Noncurrent derivative liabilities
|
|
(354
|
)
|
|
—
|
|
||
Net amounts of liabilities on balance sheet
|
|
(9,410
|
)
|
|
—
|
|
||
Total derivative assets (liabilities), net
|
|
$
|
(9,410
|
)
|
|
$
|
2,603
|
|
•
|
Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the reporting date.
|
•
|
Level 2: Observable market-based inputs or unobservable inputs corroborated by market data. These are inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
|
•
|
Level 3: Unobservable inputs not corroborated by market data and may be used with internally developed methodologies that result in management’s best estimate of fair value.
|
|
|
Fair value measurements at September 30, 2018 using:
|
|
|
||||||||||||
In thousands
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Derivative liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Swaps
|
|
$
|
—
|
|
|
$
|
(9,410
|
)
|
|
$
|
—
|
|
|
$
|
(9,410
|
)
|
Total
|
|
$
|
—
|
|
|
$
|
(9,410
|
)
|
|
$
|
—
|
|
|
$
|
(9,410
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Fair value measurements at December 31, 2017 using:
|
|
|
||||||||||||
In thousands
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Derivative assets:
|
|
|
|
|
|
|
|
|
||||||||
Swaps
|
|
$
|
—
|
|
|
$
|
2,603
|
|
|
$
|
—
|
|
|
$
|
2,603
|
|
Total
|
|
$
|
—
|
|
|
$
|
2,603
|
|
|
$
|
—
|
|
|
$
|
2,603
|
|
Unobservable Input
|
|
Assumption
|
Future production
|
|
Future production estimates for each property
|
Forward commodity prices
|
|
Forward NYMEX strip prices through 2022 (adjusted for differentials), escalating 3% per year thereafter
|
Operating costs
|
|
Estimated costs for the current year, escalating 3% per year thereafter
|
Productive life of properties
|
|
Up to 50 years
|
Discount rate
|
|
10%
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
In thousands
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Proved property impairments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
82,340
|
|
Unproved property impairments
|
|
23,770
|
|
|
35,130
|
|
|
86,715
|
|
|
127,479
|
|
||||
Total
|
|
$
|
23,770
|
|
|
$
|
35,130
|
|
|
$
|
86,715
|
|
|
$
|
209,819
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||
In thousands
|
|
Carrying
Amount |
|
Estimated Fair Value
|
|
Carrying
Amount |
|
Estimated Fair Value
|
||||||||
Debt:
|
|
|
||||||||||||||
Revolving credit facility
|
|
$
|
190,000
|
|
|
$
|
190,000
|
|
|
$
|
188,000
|
|
|
$
|
188,000
|
|
Note payable
|
|
8,275
|
|
|
8,200
|
|
|
9,974
|
|
|
9,900
|
|
||||
5% Senior Notes due 2022
|
|
1,598,313
|
|
|
1,623,400
|
|
|
1,997,576
|
|
|
2,040,000
|
|
||||
4.5% Senior Notes due 2023
|
|
1,488,378
|
|
|
1,526,100
|
|
|
1,486,690
|
|
|
1,526,800
|
|
||||
3.8% Senior Notes due 2024
|
|
992,868
|
|
|
983,300
|
|
|
992,036
|
|
|
988,800
|
|
||||
4.375% Senior Notes due 2028
|
|
988,358
|
|
|
992,900
|
|
|
988,061
|
|
|
987,200
|
|
||||
4.9% Senior Notes due 2044
|
|
691,475
|
|
|
693,400
|
|
|
691,354
|
|
|
679,900
|
|
||||
Total debt
|
|
$
|
5,957,667
|
|
|
$
|
6,017,300
|
|
|
$
|
6,353,691
|
|
|
$
|
6,420,600
|
|
In thousands
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Revolving credit facility
|
|
$
|
190,000
|
|
|
$
|
188,000
|
|
Note payable
|
|
8,275
|
|
|
9,974
|
|
||
5% Senior Notes due 2022
|
|
1,598,313
|
|
|
1,997,576
|
|
||
4.5% Senior Notes due 2023
|
|
1,488,378
|
|
|
1,486,690
|
|
||
3.8% Senior Notes due 2024
|
|
992,868
|
|
|
992,036
|
|
||
4.375% Senior Notes due 2028
|
|
988,358
|
|
|
988,061
|
|
||
4.9% Senior Notes due 2044
|
|
691,475
|
|
|
691,354
|
|
||
Total debt
|
|
$
|
5,957,667
|
|
|
$
|
6,353,691
|
|
Less: Current portion of long-term debt
|
|
2,341
|
|
|
2,286
|
|
||
Long-term debt, net of current portion
|
|
$
|
5,955,326
|
|
|
$
|
6,351,405
|
|
(1)
|
The Company has the option to redeem all or a portion of its remaining 2022 Notes at the decreasing redemption prices specified in the indenture related to the 2022 Notes plus any accrued and unpaid interest to the date of redemption.
|
(2)
|
At any time prior to the indicated dates, the Company has the option to redeem all or a portion of its senior notes of the applicable series at the “make-whole” redemption prices or amounts specified in the respective senior note indentures plus any accrued and unpaid interest to the date of redemption. On or after the indicated dates, the Company may redeem all or a portion of its senior notes at a redemption price equal to 100% of the principal amount of the senior notes being redeemed plus any accrued and unpaid interest to the date of redemption.
|
|
|
Number of
non-vested shares |
|
Weighted average
grant-date fair value |
|||
Non-vested restricted shares outstanding at December 31, 2017
|
|
4,026,110
|
|
|
$
|
35.63
|
|
Granted
|
|
1,332,705
|
|
|
52.82
|
|
|
Vested
|
|
(1,077,356
|
)
|
|
46.67
|
|
|
Forfeited
|
|
(258,532
|
)
|
|
37.66
|
|
|
Non-vested restricted shares outstanding at September 30, 2018
|
|
4,022,927
|
|
|
$
|
38.24
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
In thousands
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Beginning accumulated other comprehensive income (loss), net of tax
|
|
$
|
325
|
|
|
$
|
67
|
|
|
$
|
307
|
|
|
$
|
(260
|
)
|
Foreign currency translation adjustments
|
|
105
|
|
|
202
|
|
|
123
|
|
|
529
|
|
||||
Income taxes (1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other comprehensive income, net of tax
|
|
105
|
|
|
202
|
|
|
123
|
|
|
529
|
|
||||
Ending accumulated other comprehensive income, net of tax
|
|
$
|
430
|
|
|
$
|
269
|
|
|
$
|
430
|
|
|
$
|
269
|
|
(1)
|
A valuation allowance has been recognized against all deferred tax assets associated with losses generated by the Company's Canadian operations, thereby resulting in no income taxes on other comprehensive income.
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||||||||
$ in thousands
|
|
2018
|
|
Tax rate %
|
|
2017
|
|
Tax rate %
|
|
2018
|
|
Tax rate %
|
|
2017
|
|
Tax rate %
|
||||||||||||
Expected income tax (provision) benefit based on US statutory tax rate (1)
|
|
$
|
(86,443
|
)
|
|
21
|
%
|
|
$
|
(6,087
|
)
|
|
35
|
%
|
|
$
|
(217,311
|
)
|
|
21
|
%
|
|
$
|
27,136
|
|
|
35
|
%
|
State income taxes, net of federal benefit
|
|
(12,349
|
)
|
|
3
|
%
|
|
(522
|
)
|
|
3
|
%
|
|
(31,044
|
)
|
|
3
|
%
|
|
2,326
|
|
|
3
|
%
|
||||
Tax benefit (deficiency) from stock-based compensation
|
|
235
|
|
|
—
|
%
|
|
(134
|
)
|
|
1
|
%
|
|
2,103
|
|
|
—
|
%
|
|
(3,907
|
)
|
|
(5
|
%)
|
||||
Canadian valuation allowance (2)
|
|
(51
|
)
|
|
—
|
%
|
|
(68
|
)
|
|
—
|
%
|
|
(198
|
)
|
|
—
|
%
|
|
(325
|
)
|
|
(1
|
%)
|
||||
Other, net
|
|
1,142
|
|
|
—
|
%
|
|
41
|
|
|
—
|
%
|
|
2,216
|
|
|
—
|
%
|
|
(167
|
)
|
|
—
|
%
|
||||
(Provision) benefit for income taxes
|
|
$
|
(97,466
|
)
|
|
24
|
%
|
|
$
|
(6,770
|
)
|
|
39
|
%
|
|
$
|
(244,234
|
)
|
|
24
|
%
|
|
$
|
25,063
|
|
|
32
|
%
|
(1)
|
In December 2017 the Tax Cuts and Jobs Act was signed into law, which among other things reduced the U.S. federal corporate income tax rate from 35% to 21% effective January 1, 2018.
|
(2)
|
Represents valuation allowances recognized against all deferred tax assets associated with operating loss carryforwards generated by the Company's Canadian operations during the respective periods for which the Company does not expect to realize a benefit.
|
ITEM 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Three months ended September 30, 2018
|
|
Three months ended September 30, 2017
|
||||||||||||||||||||
In thousands
|
|
Crude oil
|
|
Natural gas
|
|
Total
|
|
Crude oil
|
|
Natural gas
|
|
Total
|
||||||||||||
Crude oil and natural gas sales (GAAP)
|
|
$
|
1,038,558
|
|
|
$
|
234,680
|
|
|
$
|
1,273,238
|
|
|
$
|
550,451
|
|
|
$
|
154,367
|
|
|
$
|
704,818
|
|
Less: Transportation expenses
|
|
(39,336
|
)
|
|
(6,672
|
)
|
|
(46,008
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net crude oil and natural gas sales (non-GAAP for 2018)
|
|
$
|
999,222
|
|
|
$
|
228,008
|
|
|
$
|
1,227,230
|
|
|
$
|
550,451
|
|
|
$
|
154,367
|
|
|
$
|
704,818
|
|
Sales volumes (MBbl/MMcf/MBoe)
|
|
15,190
|
|
|
73,029
|
|
|
27,361
|
|
|
12,722
|
|
|
56,401
|
|
|
22,123
|
|
||||||
Net sales price (non-GAAP for 2018)
|
|
$
|
65.78
|
|
|
$
|
3.12
|
|
|
$
|
44.85
|
|
|
$
|
43.27
|
|
|
$
|
2.74
|
|
|
$
|
31.86
|
|
|
|
Nine months ended September 30, 2018
|
|
Nine months ended September 30, 2017
|
||||||||||||||||||||
In thousands
|
|
Crude oil
|
|
Natural gas
|
|
Total
|
|
Crude oil
|
|
Natural gas
|
|
Total
|
||||||||||||
Crude oil and natural gas sales (GAAP)
|
|
$
|
2,891,722
|
|
|
$
|
632,896
|
|
|
$
|
3,524,618
|
|
|
$
|
1,512,990
|
|
|
$
|
452,226
|
|
|
$
|
1,965,216
|
|
Less: Transportation expenses
|
|
(119,939
|
)
|
|
(22,620
|
)
|
|
(142,559
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net crude oil and natural gas sales (non-GAAP for 2018)
|
|
$
|
2,771,783
|
|
|
$
|
610,276
|
|
|
$
|
3,382,059
|
|
|
$
|
1,512,990
|
|
|
$
|
452,226
|
|
|
$
|
1,965,216
|
|
Sales volumes (MBbl/MMcf/MBoe)
|
|
44,183
|
|
|
209,069
|
|
|
79,028
|
|
|
34,975
|
|
|
162,515
|
|
|
62,061
|
|
||||||
Net sales price (non-GAAP for 2018)
|
|
$
|
62.73
|
|
|
$
|
2.92
|
|
|
$
|
42.80
|
|
|
$
|
43.26
|
|
|
$
|
2.78
|
|
|
$
|
31.67
|
|
Boe production per day
|
|
3Q 2018
|
|
3Q 2017
|
|
% Change from 3Q 2017
|
|
2Q 2018
|
|
% Change from 2Q 2018
|
|||||
Bakken
|
|
167,643
|
|
|
136,851
|
|
|
23
|
%
|
|
158,119
|
|
|
6
|
%
|
SCOOP
|
|
63,270
|
|
|
57,283
|
|
|
10
|
%
|
|
64,786
|
|
|
(2
|
%)
|
STACK
|
|
56,129
|
|
|
35,619
|
|
|
58
|
%
|
|
51,722
|
|
|
9
|
%
|
All other
|
|
9,862
|
|
|
13,035
|
|
|
(24
|
%)
|
|
9,432
|
|
|
5
|
%
|
Total
|
|
296,904
|
|
|
242,788
|
|
|
22
|
%
|
|
284,059
|
|
|
5
|
%
|
•
|
Volumes of crude oil and natural gas produced;
|
•
|
Crude oil and natural gas net sales price differentials relative to NYMEX benchmark prices; and
|
•
|
Per unit operating and administrative costs.
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Average daily production:
|
|
|
|
|
|
|
|
|
||||||||
Crude oil (Bbl per day)
|
|
164,605
|
|
|
140,611
|
|
|
161,856
|
|
|
128,476
|
|
||||
Natural gas (Mcf per day)
|
|
793,793
|
|
|
613,060
|
|
|
765,821
|
|
|
595,294
|
|
||||
Crude oil equivalents (Boe per day)
|
|
296,904
|
|
|
242,788
|
|
|
289,492
|
|
|
227,692
|
|
||||
Average net sales prices (1):
|
|
|
|
|
|
|
|
|
||||||||
Crude oil ($/Bbl)
|
|
$
|
65.78
|
|
|
$
|
43.27
|
|
|
$
|
62.73
|
|
|
$
|
43.26
|
|
Natural gas ($/Mcf)
|
|
$
|
3.12
|
|
|
$
|
2.74
|
|
|
$
|
2.92
|
|
|
$
|
2.78
|
|
Crude oil equivalents ($/Boe)
|
|
$
|
44.85
|
|
|
$
|
31.86
|
|
|
$
|
42.80
|
|
|
$
|
31.67
|
|
Crude oil net sales price discount to NYMEX ($/Bbl)
|
|
$
|
(3.72
|
)
|
|
$
|
(4.98
|
)
|
|
$
|
(4.05
|
)
|
|
$
|
(6.07
|
)
|
Natural gas net sales price premium (discount) to NYMEX ($/Mcf)
|
|
$
|
0.22
|
|
|
$
|
(0.26
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.37
|
)
|
Production expenses ($/Boe)
|
|
$
|
3.77
|
|
|
$
|
3.82
|
|
|
$
|
3.62
|
|
|
$
|
3.86
|
|
Production taxes (% of net crude oil and natural gas sales)
|
|
8.0
|
%
|
|
7.3
|
%
|
|
7.8
|
%
|
|
6.8
|
%
|
||||
Depreciation, depletion, amortization and accretion ($/Boe)
|
|
$
|
17.15
|
|
|
$
|
19.00
|
|
|
$
|
17.35
|
|
|
$
|
19.31
|
|
Total general and administrative expenses ($/Boe)
|
|
$
|
1.61
|
|
|
$
|
1.99
|
|
|
$
|
1.70
|
|
|
$
|
2.10
|
|
(1)
|
See the previous section titled
Change in presentation of revenues
for a discussion and calculation of net sales prices, which are non-GAAP measures for the
three and nine
months ended
September 30, 2018
.
|
|
|
Three months ended September 30,
|
||||||
In thousands
|
|
2018
|
|
2017
|
||||
Crude oil and natural gas sales
|
|
$
|
1,273,238
|
|
|
$
|
704,818
|
|
Gain (loss) on natural gas derivatives, net
|
|
(2,025
|
)
|
|
8,602
|
|
||
Crude oil and natural gas service operations
|
|
10,938
|
|
|
13,323
|
|
||
Total revenues
|
|
1,282,151
|
|
|
726,743
|
|
||
Operating costs and expenses
|
|
(790,843
|
)
|
|
(634,990
|
)
|
||
Other expenses, net
|
|
(79,673
|
)
|
|
(74,362
|
)
|
||
Income before income taxes
|
|
411,635
|
|
|
17,391
|
|
||
Provision for income taxes
|
|
(97,466
|
)
|
|
(6,770
|
)
|
||
Net income
|
|
$
|
314,169
|
|
|
$
|
10,621
|
|
Production volumes:
|
|
|
|
|
||||
Crude oil (MBbl)
|
|
15,144
|
|
|
12,936
|
|
||
Natural gas (MMcf)
|
|
73,029
|
|
|
56,401
|
|
||
Crude oil equivalents (MBoe)
|
|
27,315
|
|
|
22,337
|
|
||
Sales volumes:
|
|
|
|
|
||||
Crude oil (MBbl)
|
|
15,190
|
|
|
12,722
|
|
||
Natural gas (MMcf)
|
|
73,029
|
|
|
56,401
|
|
||
Crude oil equivalents (MBoe)
|
|
27,361
|
|
|
22,123
|
|
|
|
Three months ended September 30,
|
|
Volume
increase |
|
Volume
percent increase |
||||||||||||
|
|
2018
|
|
2017
|
|
|
||||||||||||
|
|
Volume
|
|
Percent
|
|
Volume
|
|
Percent
|
|
|||||||||
Crude oil (MBbl)
|
|
15,144
|
|
|
55
|
%
|
|
12,936
|
|
|
58
|
%
|
|
2,208
|
|
|
17
|
%
|
Natural gas (MMcf)
|
|
73,029
|
|
|
45
|
%
|
|
56,401
|
|
|
42
|
%
|
|
16,628
|
|
|
29
|
%
|
Total (MBoe)
|
|
27,315
|
|
|
100
|
%
|
|
22,337
|
|
|
100
|
%
|
|
4,978
|
|
|
22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Three months ended September 30,
|
|
Volume
increase |
|
Volume
percent increase |
||||||||||||
|
|
2018
|
|
2017
|
|
|
||||||||||||
|
|
MBoe
|
|
Percent
|
|
MBoe
|
|
Percent
|
|
|||||||||
North Region
|
|
16,252
|
|
|
59
|
%
|
|
13,509
|
|
|
60
|
%
|
|
2,743
|
|
|
20
|
%
|
South Region
|
|
11,063
|
|
|
41
|
%
|
|
8,828
|
|
|
40
|
%
|
|
2,235
|
|
|
25
|
%
|
Total
|
|
27,315
|
|
|
100
|
%
|
|
22,337
|
|
|
100
|
%
|
|
4,978
|
|
|
22
|
%
|
|
|
Three months ended September 30,
|
||||||
In thousands
|
|
2018
|
|
2017
|
||||
Geological and geophysical costs
|
|
$
|
2,324
|
|
|
$
|
1,389
|
|
Exploratory dry hole costs
|
|
—
|
|
|
—
|
|
||
Exploration expenses
|
|
$
|
2,324
|
|
|
$
|
1,389
|
|
|
|
Three months ended September 30,
|
||||||
$/Boe
|
|
2018
|
|
2017
|
||||
Crude oil and natural gas
|
|
$
|
16.91
|
|
|
$
|
18.70
|
|
Other equipment
|
|
0.18
|
|
|
0.23
|
|
||
Asset retirement obligation accretion
|
|
0.06
|
|
|
0.07
|
|
||
Depreciation, depletion, amortization and accretion
|
|
$
|
17.15
|
|
|
$
|
19.00
|
|
|
|
Three months ended September 30,
|
||||||
$/Boe
|
|
2018
|
|
2017
|
||||
General and administrative expenses
|
|
$
|
1.18
|
|
|
$
|
1.45
|
|
Non-cash equity compensation
|
|
0.43
|
|
|
0.54
|
|
||
Total general and administrative expenses
|
|
$
|
1.61
|
|
|
$
|
1.99
|
|
|
|
Nine months ended September 30,
|
||||||
In thousands
|
|
2018
|
|
2017
|
||||
Crude oil and natural gas sales
|
|
$
|
3,524,618
|
|
|
$
|
1,965,216
|
|
Gain (loss) on crude oil and natural gas derivatives, net
|
|
(4,536
|
)
|
|
83,482
|
|
||
Crude oil and natural gas service operations
|
|
40,210
|
|
|
24,959
|
|
||
Total revenues
|
|
3,560,292
|
|
|
2,073,657
|
|
||
Operating costs and expenses
|
|
(2,296,986
|
)
|
|
(1,933,724
|
)
|
||
Other expenses, net
|
|
(228,492
|
)
|
|
(217,463
|
)
|
||
Income (loss) before income taxes
|
|
1,034,814
|
|
|
(77,530
|
)
|
||
(Provision) benefit for income taxes
|
|
(244,234
|
)
|
|
25,063
|
|
||
Net income (loss)
|
|
$
|
790,580
|
|
|
$
|
(52,467
|
)
|
Production volumes:
|
|
|
|
|
||||
Crude oil (MBbl)
|
|
44,187
|
|
|
35,074
|
|
||
Natural gas (MMcf)
|
|
209,069
|
|
|
162,515
|
|
||
Crude oil equivalents (MBoe)
|
|
79,031
|
|
|
62,160
|
|
||
Sales volumes:
|
|
|
|
|
||||
Crude oil (MBbl)
|
|
44,183
|
|
|
34,975
|
|
||
Natural gas (MMcf)
|
|
209,069
|
|
|
162,515
|
|
||
Crude oil equivalents (MBoe)
|
|
79,028
|
|
|
62,061
|
|
|
|
Nine months ended September 30,
|
|
Volume
increase |
|
Volume
percent increase |
||||||||||||
|
|
2018
|
|
2017
|
|
|
||||||||||||
|
|
Volume
|
|
Percent
|
|
Volume
|
|
Percent
|
|
|||||||||
Crude oil (MBbl)
|
|
44,187
|
|
|
56
|
%
|
|
35,074
|
|
|
56
|
%
|
|
9,113
|
|
|
26
|
%
|
Natural gas (MMcf)
|
|
209,069
|
|
|
44
|
%
|
|
162,515
|
|
|
44
|
%
|
|
46,554
|
|
|
29
|
%
|
Total (MBoe)
|
|
79,031
|
|
|
100
|
%
|
|
62,160
|
|
|
100
|
%
|
|
16,871
|
|
|
27
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Nine months ended September 30,
|
|
Volume
increase |
|
Volume
percent increase |
||||||||||||
|
|
2018
|
|
2017
|
|
|
||||||||||||
|
|
MBoe
|
|
Percent
|
|
MBoe
|
|
Percent
|
|
|||||||||
North Region
|
|
46,829
|
|
|
59
|
%
|
|
36,106
|
|
|
58
|
%
|
|
10,723
|
|
|
30
|
%
|
South Region
|
|
32,202
|
|
|
41
|
%
|
|
26,054
|
|
|
42
|
%
|
|
6,148
|
|
|
24
|
%
|
Total
|
|
79,031
|
|
|
100
|
%
|
|
62,160
|
|
|
100
|
%
|
|
16,871
|
|
|
27
|
%
|
|
|
Nine months ended September 30,
|
||||||
In thousands
|
|
2018
|
|
2017
|
||||
Geological and geophysical costs
|
|
$
|
4,346
|
|
|
$
|
9,434
|
|
Exploratory dry hole costs
|
|
1
|
|
|
157
|
|
||
Exploration expenses
|
|
$
|
4,347
|
|
|
$
|
9,591
|
|
|
|
Nine months ended September 30,
|
||||||
$/Boe
|
|
2018
|
|
2017
|
||||
Crude oil and natural gas
|
|
$
|
17.10
|
|
|
$
|
18.95
|
|
Other equipment
|
|
0.19
|
|
|
0.29
|
|
||
Asset retirement obligation accretion
|
|
0.06
|
|
|
0.07
|
|
||
Depreciation, depletion, amortization and accretion
|
|
$
|
17.35
|
|
|
$
|
19.31
|
|
|
|
Nine months ended September 30,
|
||||||
$/Boe
|
|
2018
|
|
2017
|
||||
General and administrative expenses
|
|
$
|
1.28
|
|
|
$
|
1.58
|
|
Non-cash equity compensation
|
|
0.42
|
|
|
0.52
|
|
||
Total general and administrative expenses
|
|
$
|
1.70
|
|
|
$
|
2.10
|
|
In millions
|
1Q 2018
|
2Q 2018
|
3Q 2018
|
YTD 2018
|
||||||||
Exploration and development drilling
|
$
|
496.3
|
|
$
|
627.9
|
|
$
|
633.5
|
|
$
|
1,757.7
|
|
Land costs (1)
|
67.0
|
|
44.9
|
|
105.5
|
|
217.4
|
|
||||
Capital facilities, workovers and other corporate assets
|
33.0
|
|
41.4
|
|
51.8
|
|
126.2
|
|
||||
Seismic
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Capital expenditures, excluding acquisitions
|
596.3
|
|
714.2
|
|
790.8
|
|
2,101.3
|
|
||||
Acquisitions of producing properties
|
2.6
|
|
21.5
|
|
1.4
|
|
25.5
|
|
||||
Acquisitions of non-producing properties (1)
|
28.0
|
|
21.6
|
|
2.0
|
|
51.6
|
|
||||
Total acquisitions
|
30.6
|
|
43.1
|
|
3.4
|
|
77.1
|
|
||||
Total capital expenditures
|
$
|
626.9
|
|
$
|
757.3
|
|
$
|
794.2
|
|
$
|
2,178.4
|
|
(1)
|
These captions include costs incurred during the
nine months ended September 30, 2018
to acquire minerals, most of which, along with minerals acquired prior to 2018, were contributed to our newly-formed minerals subsidiary in October 2018 as part of the transaction described in
Note 12. Subsequent Event
in
Notes to Unaudited Condensed Consolidated Financial Statements
.
|
ITEM 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
ITEM 1.
|
Legal Proceedings
|
ITEM 1A.
|
Risk Factors
|
ITEM 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
(a)
|
Recent Sales of Unregistered Securities – Not applicable.
|
(b)
|
Use of Proceeds – Not applicable.
|
Period
|
|
Total number of shares purchased (1)
|
|
Average price paid per share (2)
|
|
Total number of shares purchased as part of publicly announced plans or programs
|
|
Maximum number of shares that may yet be purchased under the plans or programs
|
|||||
July 1, 2018 to July 31, 2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
August 1, 2018 to August 31, 2018
|
|
11,142
|
|
|
$
|
61.40
|
|
|
—
|
|
|
—
|
|
September 1, 2018 to September 30, 2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
11,142
|
|
|
$
|
61.40
|
|
|
—
|
|
|
—
|
|
(1)
|
In connection with restricted stock grants under the Company's 2013 Long-Term Incentive Plan, we adopted a policy that enables employees to surrender shares to cover their tax liability. Shares indicated as having been purchased in the table above represent shares surrendered by employees to cover tax liabilities. We paid the associated taxes to the applicable taxing authorities.
|
(2)
|
The price paid per share was the closing price of our common stock on the date the restrictions lapsed on such shares.
|
ITEM 3.
|
Defaults Upon Senior Securities
|
ITEM 4.
|
Mine Safety Disclosures
|
ITEM 6.
|
Exhibits
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
10.1*†
|
|
|
|
|
|
10.2***†
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32**
|
|
|
|
|
|
101.INS**
|
|
XBRL Instance Document
|
|
|
|
101.SCH**
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL**
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF**
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB**
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE**
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
***
|
Re-filed herewith pursuant to Item 10(d) of Regulation S-K.
|
†
|
Management contracts or compensatory plans or arrangements filed pursuant to Item 601(b)(10)(iii) of Regulation S-K.
|
|
|
CONTINENTAL RESOURCES, INC.
|
||
|
|
|
|
|
Date:
|
October 29, 2018
|
By:
|
|
/s/ John D. Hart
|
|
|
|
|
John D. Hart
|
|
|
|
|
Sr. Vice President, Chief Financial Officer and Treasurer
(Duly Authorized Officer and Principal Financial Officer) |
1 Year Continental Resources Chart |
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