By Sarfaraz A. Khan
Summary: The shares of Continental Resources slumped last week.The company announced an uptake in drilling costs, cut the top end of its production guidance.The increase in its core Bakken reserve base was also not that great. That said, Continental Resources is not the same E&P company as two years ago.
The shares of Continental Resources (NYSE:CLR) have fallen by more than 6% last week, closing at $68.47 for the week ending Friday when the company announced an uptake in drilling costs for the year and trimmed the top-end of its production forecast. The news came on top of the unexpected departure of Rick Bott, the COO. Is the company's robust growth story losing its steam or is this a buying opportunity for investors?
On Wednesday, Continental Resources increased its capital expenditure plans for 2014 by $500 million to $4.55 billion due to higher oil well completion expenses at its two core areas at North Dakota and Oklahoma. This would translate into one-third increase in cost per well to $10 million.
The company also said that it would increase its production by between 27% and 30% this year, as opposed to its previous guidance of an increase of between 26% and 32%.
Additionally, the company has also named Jack Stark, the head of exploration, as the new COO.
Bakken and SCOOP
Continental Resources has been one of the biggest winners of the shale boom. With 1.20 million net acres at the Bakken formation in North Dakota and Montana, Continental … read full article at Seeking Alpha.