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Continental Resources’ Debt Maturities and Liquidity

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A look at debt maturities

As we saw in the previous part, Continental Resources’ (CLR) key strategy this year is debt reduction through asset sales. In its November presentation, the company noted that it received $775 million through asset sales in 2016 and 2017.

The graph below notes that CLR’s long-term debt has been consistently declining every quarter with a goal to reach $5 billion.

The graph on the left shows CLR’s debt maturities with $500 million coming due next year. In the 3Q17 earnings conference, CLR management noted that the company will continue to focus on debt reduction. The company believes that in the current commodity price environment, it will generate strong positive cash flows. It expects to utilize those excess cash flows for debt reduction.

Liquidity

Continental Resources had $10.8 million in cash and cash equivalents at the end of 3Q17. It also had additional liquidity of $2.8 billion in the form of an unsecured credit facility; $938 million was drawn, and the remaining remains undrawn. The company also noted that the credit facility could be upsized to $4 billion based on lender consent.

In the following part, we’ll look at CLR’s cash flow trends.

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