U.S. shale producer Continental Resources Inc on Monday posted a bigger-than-expected second-quarter loss as the coronavirus crisis and related lockdowns pummeled demand for fuel and hammered oil prices.
The largest producer in North Dakota’s Bakken basin – the second-biggest U.S. shale field – had cut as much as 55% of its planned oil output in the June quarter as the oilfield was among the hardest hit by the price plunge.
Average daily production tumbled 38.8% to 202,815 barrels of oil equivalent (boe), while prices crashed 78.1% to $7.88 per boe, the company said.
The company said it expected second-quarter production deferral to help it generate an additional $90 million in cash flow from operations if U.S. oil fetched around $40 a barrel.
Continental said it now expects full-year oil production to range between 155,000 barrels per day (bpd) and 165,000 bpd, about 20% lower than its original forecast at its midpoint.
It was also on track to achieve its reduced 2020 capital expenditure guidance of $1.2 billion or lower.
Continental said in a filing it can use other third party pipelines or rail facilities to transport its Bakken crude output if the Dakota Access Pipeline (DAPL) is shut down, but cautioned that the alternatives may be more costly.
The 570,000 barrel-per-day DAPL, the main artery carrying crude out of Bakken and to Midwest and Gulf of Mexico market, is facing a federal court order to be closed and drained. An appeals court has allowed Energy Transfer LP’s DAPL to continue operating for now.
Continental reported a net loss attributable to it of $239.3 million for the quarter ended June 30.
Excluding items, the company posted a loss of 71 cents per shares, bigger than estimates of 59 cents, according to Refinitiv IBES data.
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