NGL’s price competitiveness in the past few years prompted Continental Resources to shift focus from crude oil to natural gas and natural gas liquids.
Continental Resources’ production in the SCOOP region averaged 36,346 boe per day for 3Q14, which is 81% higher than 3Q13. In 9M14, SCOOP production increased 93% over the same period in 2013.
In 2013, the Bakken region accounted for ~56% of Continental Resources’ total production of oil and gas. That year, the company’s proved reserves in North Dakota Bakken shale increased 33% year-over-year.
In 3Q14, Continental Resources’ revenues from crude oil and natural gas sales increased 24.2% due to 24% higher sales volume from higher shale drilling in the Bakken field and the SCOOP play.
Continental Resources’ net income more than tripled in 3Q14. Net income margin also improved significantly, from 17% in 3Q13 to 47% in 3Q14.
Despite the crude oil price fall, Continental Resources’ revenues increased. This was primarily due to higher production and higher natural gas prices.
From 2011 to 2013, the number of Continental Resources’ net wells has increased 68%, to 334. From 2011 to 2013, Continental Resources’ total oil and natural gas production more than doubled.
Continental Resources (CLR) has been growing primarily through extension and discoveries as opposed to proved reserves acquisitions.
In the past one year, Continental Resource’s share price has gone down by 29%. Share prices of most of the oil-heavy upstream companies have declined since June this year.
The US airlines’ improved operational efficiency was a driving factor for higher profitability and share price appreciation.
Unlike its US peers, China Southern is exposed to fluctuations in the exchange rate between the Chinese renminbi and foreign currencies.
US airlines have been growing their capacity at a lower rate compared to Chinese airlines.
China Southern Airlines had a fleet size of 561 aircraft in FY13, which is the largest among Chinese airlines.
China Southern’s net margin in FY13 was higher than its operating margin, primarily due to the appreciation of the renminbi against the US dollar.
More than half of China Southern’s total operating expenses in FY13 were related to flight operating expenses.
Of the Big Three Chinese players, China Southern Airlines has the largest domestic network, but the smallest international network.
In FY13, revenue declined by 1%, mainly due to the slowing GDP growth that negatively affected the aviation industry.
The global financial crisis in 2008 hit China’s airline industry after it enjoyed double-digit growth in passenger traffic for more than a decade.
China Southern Airlines’ network connects 1,024 destinations in 187 countries, including all major cities in Asia, Europe, the United States, Australia, and Africa.
During the company’s 3Q14 earnings call, management said it wanted to get back to an A- credit rating within four or five years. But that won’t be easy.