Continental Resources Q3 Profit Plunges; Adj. EPS Tops Estimates

11/5/2009 1:23 PM ET

(RTTNews) - Thursday, oil and natural gas company Continental Resources Inc. (CLR: News ) reported a sharp decline in third quarter profit, hurt by the hefty slide in quarterly revenues as crude oil and natural gas prices plummeted. Adjusted earnings per share, however, came in above the Street's estimate. Looking forward, the company raised its production guidance. Separately, the company announced the promotion Jeffrey Hume to president and chief operating officer.

The Enid, Oklahoma-based company reported net income for the third quarter of $34.9 million or $0.21 per share, compared to $105.3 million or $0.62 per share in the year-ago quarter.

Net income included a pre-tax leasehold property impairment charge of $11.8 million and mark-to-market losses on natural gas fixed price and basis swaps of $2.1 million. In the third quarter of 2008, the company recorded a $9.9 million pre-tax leasehold property impairment charge.

Excluding items, Continental's net income was $44.4 million or $0.26 per share, for the third quarter of 2009.

On average, 15 analysts polled by Thomson Reuters expected the company to earn $0.23 per share for the quarter. Analysts' estimates typically exclude special items.

Income from operations was $59.3 million for the third quarter of 2009, compared with $171.2 million for the third quarter last year.

Total revenues for the quarter decreased to $170.20 million from $293.67 million in the prior-year quarter. Eleven analysts had a revenue consensus of $171.14 million for the third quarter.

Total oil and natural gas sales were $168.4 million, compared to $286.2 million for the same quarter last year.

Average daily production was 37,384 barrels of oil equivalent per day or Boepd for the third quarter of 2009, 12% higher than 33,297 Boepd in the third quarter of 2008.

In the third quarter, average realized sales price per Boe was $48.19, down 48% from the average realized sales price of $93.21 per Boe for the third quarter of 2008.

The average realized price for crude oil was $58.78 per barrel, while the average realized natural gas price was $2.98 per Mcf. Average realized prices were $108.37 per barrel and $7.97 per Mcf in the third quarter last year.

Continental reduced production expenses during the third quarter. Production expense was $6.50 per Boe for the third quarter of 2009, compared to $8.22 for the third quarter of 2008.

For the nine-month period, the company's net income plummeted to $21.82 million or $0.13 per share from $320.53 million or $1.89 per share in the year-ago period. Revenues plunged to $418.57 million from $824.69 million in the same period last year.