Continental Resources beats second-quarter profit estimates

U.S. shale producer Continental Resources Inc (CLR.N) beat second-quarter profit expectations on Thursday, on the back of higher oil prices.

Continental also said it was still evaluating a take-private offer in June from billionaire-founder Harold Hamm’s family trust, which valued the company at over $25 billion.

The proposal and the quarterly profit jump both come at a time of soaring energy prices on tight supply as demand rose to pre-pandemic levels and as Western countries imposed sanctions on Russia following its invasion of Ukraine.

Analysts also see the take-private attempt as an indication of Hamm’s clear frustration at how public producers are expected to forego raising crude output in favor of higher shareholder payouts, even as oil prices have risen beyond $100 a barrel.

Continental had said at the time it formed a special committee of independent directors and hired advisors to consider Hamm’s proposal.

U.S. crude has gained 40.6% since the start of 2022 and 5.5% through the June quarter.

Continental said its average adjusted sales price nearly doubled to $76.02 per barrel of oil equivalent (boe) from $39.99 boe a year earlier.

The Oklahoma City-based firm said its total average production in the reported quarter was 400,168 boe per day, up 18% from a year earlier.

The company, however, raised its 2022 production expense per boe forecast to $3.75-$4.25 from $3.50-$4.00, citing increased oil well intervention activity and inflationary pressure.

Net income attributable to the company more than quadrupled to $1.21 billion, or $3.35 per share, in the quarter ended June 30, compared with year-ago profit of $289.33 million, or 79 cents per share.

Excluding items, the company earned $3.47 a share, above Wall Street consensus of $3.18 per share.