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Understanding the Key Trends in Continental Resources’ Cash Flow

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Continental’s cash flow

Continental Resources’ (CLR) CFO (cash flow from operations operating cash flow) of ~$1.4 billion during the first nine months of 2017 (ended September 30), compared with ~$863.88 million in the first nine months of 2016 (ended September 30, 2016).

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CLR’s 3Q17 cash flow from operations

CLR’s 3Q17 CFO came in at $431.4 million, compared with the CFO of ~$366.2 million it reported in 3Q16. In 2Q17, CLR reported CFO of $446.37 million. This YoY (year-over-year) increase was driven by higher net income.

CLR’s net income trends

CLR’s net profit in 3Q17 came to $10.6 million, compared with its net loss of ~$109.6 million in 3Q16. Its net loss in the first nine months of 2017 came to ~$52.5 million, compared with its net loss of $427.3 million during the corresponding period of 2016.

This improvement in net income in both periods was driven by higher revenues in 2017 compared with 2016—on a quarterly as well as on a first-nine-month basis.

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CLR’s revenue trends

CLR’s revenues in the first nine months of 2017 reached ~$2.1 billion, compared with ~$1.4 billion in revenues during the same period of 2016. The improvement in CLR’s revenues was driven by a higher average realized price of $31.86 per barrel of oil equivalent, compared with the average realized price of $26.42 per barrel of oil equivalent during the corresponding period of 2016.

What drove CLR’s 2017 cash flow?

CLR’s CFO in the first nine months of 2017 was higher primarily due to its lower net loss. Higher accounts payable (which increased by $128.34 million during the first nine months of 2017, compared with the $43.1-million decline we saw during the first nine months 2016) also supported its higher cash flow in 2017.

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