Continental Resources Reports Second Quarter 2007 Results and Updates Guidance
PRNewswire-FirstCall
ENID, Okla.

Continental Resources today reported unaudited second quarter 2007 results and updated full year financial and operational guidance. After the effect of a $198.4 million tax provision charge taken upon conversion of Continental to a subchapter C corporation in connection with the Company's initial public offering (IPO) in May 2007, the Company reported a net loss for the three months ended June 30, 2007, of $142.5 million, or $(0.87) per diluted share, on revenues of $145.3 million. Excluding the effect of the IPO-related tax charge, net income for the second quarter of 2007 was $55.9 million, or $0.34 per diluted share.

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Net income after pro forma adjustments to provide for income taxes as if Continental had been a subchapter C corporation during the entirety of both quarters is $44.2 million, or $.27 per diluted share, for the three months ended June 30, 2007 and $41.0 million, or $.26 per diluted share, for the three months ended June 30, 2006.

The following table contains unaudited financial and operational highlights for the three and six months ended June 30, 2007 compared to the corresponding periods in the prior year.

                           Three months ended        Six months ended
                                June 30,                  June 30,
                           2007         2006         2007         2006
  Average daily
   production:
  Crude oil (bopd)        23,674       19,921       23,391       19,278
  Natural gas (Mcfd)      29,618       23,159       29,229       24,274
  Crude oil equivalent
   (boepd)                28,610       23,781       28,262       23,323
  Average prices: (1)
  Crude oil ($ / Bbl)     $58.25       $58.60       $53.44       $55.93
  Natural gas ($ / Mcf)    $6.07        $5.74        $6.11        $6.46
  Crude oil equivalent
   ($ / boe)              $54.44       $54.75       $50.52       $52.92
  Production expense
   ($ / boe) (1)           $8.42        $6.67        $7.43        $7.27
  EBITDAX (in
   thousands) (2)       $108,659      $96,889     $199,655     $174,506
  Net income (loss)
   (in thousands) (3)  $(142,498)     $66,061     $(88,684)    $116,354
  Diluted net income
   (loss) per share       $(0.87)       $0.41       $(0.55)       $0.73


  (1) Oil sales volumes are 31 MBbls less than oil production for the three
      months ended June 30, 2007 and 45 MBbls greater than oil production
      for the three months ended June 30, 2006. Oil sales volumes are 47
      MBbls and 51 MBbls less than oil production for the six months ended
      June 30, 2007 and 2006, respectively. Average prices and per unit
      production expense have been calculated using sales volumes.
  (2) EBITDAX represents earnings before interest expense, income taxes
      (when applicable), depreciation, depletion, amortization and
      accretion, property impairments, exploration expense and non-cash
      compensation expense. EBITDAX is not a measure of net income or cash
      flow as determined by generally accepted accounting principles
      (GAAP). A reconciliation of net income to EBITDAX is provided later in
      this press release.
  (3) In connection with the IPO, the Company recorded a charge of $198.4
      million to recognize deferred taxes upon its conversion from a
      non-taxable subchapter S corporation to a taxable subchapter C
      corporation. The Company provides income taxes on net income for
      periods after the IPO.


  Management Comments

"The 20% increase in daily equivalent production was the principal driver for the higher revenues and EBITDAX during the second quarter of 2007 compared to the second quarter of 2006", said Harold Hamm, Chairman and Chief Executive Officer. "Additionally, our financial results benefited from a $3.92 per barrel improvement in our crude oil basis differential from first quarter 2007 to second quarter 2007."

"With higher expected revenues as a result of current crude oil prices and our recent $72.90 crude oil hedges, I will be recommending to the Board an increase in our 2007 capital expenditure budget to $482 million, an increase of $45 million", said Mr. Hamm. "The Company has continued a four drilling rig schedule in the Montana Bakken area longer than originally planned in order to take advantage of this favorable crude oil drilling economic environment and expects to drill 11 additional net wells in the Montana Bakken this year. I think it makes a lot of sense to target increasing crude oil production during this time. The proposed budget increase also includes $5 million for acreage acquisitions, bringing the new land budget amount to $37 million."

Guidance Update

Delays in completion of the new Hiland Partners Badlands Plant limited natural gas sales in the Red River Units to less than 200 net Mcf per day during the second quarter. The plant is now expected to be operational in August with the Company's share of natural gas volumes growing to approximately 10,000 MMBtus per day by the end of this year. Due to the delays in commencement of gas sales at the Badlands Plant and delays in completions and pipeline connections in the Woodford Shale area, full year natural gas production is expected to be near or below the low end of the guidance range of 13,800 to 15,000 MMcf. However, crude oil production is expected to be near the high end of the guidance range of 8,400 to 8,800 Mbbls. As a result, the Company is maintaining its equivalent production guidance range of 10,700 to 11,300 Mboe.

Greater workover activity and higher labor and service costs led to a production cost per boe of $8.42, outside the guidance range for the second quarter 2007. In the first quarter 2007, production costs were $6.40 per boe, outside the guidance range on the low side. Some of the workover and other production operations conducted during the second quarter would have been incurred during the first quarter were it not for cold weather conditions in the Rocky Mountain region. The Company believes full year production cost per boe will be within the guidance range of $6.50 to $7.20 per boe, though likely at the high end of the range.

The guidance for depreciation, depletion, amortization and accretion is being increased to between $9.00 and $9.50 per boe. The relative contribution of production from higher cost basis properties is greater that originally estimated.

Operations Update

The following table presents average daily production for each of the Company's principal regions for the three months ended June 30, 2007 compared to the three months ended June 30, 2006 and March 31, 2007.

                                  Q2 2007         Q2 2006        Q1 2007
                               (boe per day)  (boe per day)   (boe per day)
  Red River Units                  12,680          10,806        12,599
  Montana Bakken Field              7,890           6,406         7,685
  North Dakota Bakken Field           924              79           429
  Other Rockies                     1,774           1,556         1,724
  Oklahoma Woodford Field             586              20           440
  Other Mid-Continent               4,320           3,949         4,307
  Gulf Coast                          436             965           727
  Total                            28,610          23,781        27,911



In the Red River Units, average daily production was up 17% from the second quarter 2006 average. During the second quarter, the Company completed 7 gross (6.8 net) horizontal wells and 3 gross (2.9 net) horizontal re-entries within the Red River Units. The Company currently has five drilling rigs working in the Red River Units.

In the Montana Bakken field, average daily production was up 23% from the second quarter 2006 average due to results from the infield drilling program. During the second quarter, the Company participated in 10 gross (6.7 net) completed wells in the Bakken field with 100% success. The Company is finishing development of its acreage on 640-acre spacing and is currently evaluating the potential to develop the Montana Bakken on 320 acre spacing. The Company's initial 320-acre well, the Margaret 3-15H, completed in April is currently producing about 180 boepd and appears to meet or exceed our economic model of 300 MBoe of ultimate per well reserves for increased density wells. The Company's second 320-acre well, the Dorothy 3-33H, is currently drilling. The Company's second 640-acre tri-lateral in the northern part of the field, the Sonja 1-34H, has been producing 35 days at an average rate of 245 bopd and appears to exceed our economic model of 250 MBoe of ultimate per well reserves for the field extension wells.

In the North Dakota Bakken field, average daily production was up 845 boepd from the second quarter 2006 average. During the second quarter, the Company participated in 9 gross (4.6 net) completed wells in the North Dakota Bakken field with 100% success. The Company currently has two operated drilling rigs working in the field and three drilling rigs operated under a joint venture agreement with ConocoPhillips. The Company expects to add an additional operated drilling rig in the North Dakota field in September. Recent completions in the North Dakota field include the Brown 44-1H (35% WI) for 519 gross bopd and the State Veeder 41-36H (46% WI) completed for 344 bopd. The 2007 exit rate for North Dakota Bakken Shale production is forecasted to be 2,000 net boepd.

In the Oklahoma Woodford Shale field in the Mid-Continent region, the Company currently has four operated drilling rigs working and plans to add a fifth drilling rig in August. During the second quarter, the Company completed 4 gross (1.5 net) Woodford Shale wells and participated in another 15 gross (1.0 net) non-operated Woodford Shale completions. The Company-operated completions, the Arlan 1-15H (20% WI), Pasquali 1-30H (48% WI), Harden 1-20H (32% WI) and Holder 1-5H (53% WI) had 7-day average initial production rates of 4,645 Mcfd, 1,360 Mcfd, 2,125 Mcfd and 1,204 Mcfd of natural gas, respectively. Recently, the Company completed the Pratt 1-17H (23% WI) for a 7-day average initial production rate of 3,752 Mcfd. The 2007 exit rate for Oklahoma Woodford Shale production is forecasted to be 15,000 net Mcfd.

Conference Call Information

The Company will host a conference call on Monday, August 6, 2007, at 10:00 a.m. Central Time to discuss this press release. Interested parties may listen to the conference call via the Company's website at http://www.contres.com/ or by dialing (866) 271-6130. The passcode is 44488326. A replay of the conference call will be available for 30 days on the Company's website or by dialing (888) 286-8010. The passcode is 23421529.

Conference Presentation

The Company also announced its participation in The Oil & Gas Conference to be held in Denver, Colorado on August 19 - 23, 2007. President Mark E. Monroe will present at the conference on Wednesday, August 22, 2007, at 4:00 p.m. Mountain Time. Mr. Monroe's presentation will be webcast live on the Company's website at http://www.contres.com/ and at http://www.theoilandgasconference.com/index.html.

About Continental Resources

Continental Resources is an independent oil and natural gas exploration and production company with operations in the Rocky Mountain, Mid-Continent and Gulf Coast regions of the United States. The Company focuses its operations in large new or developing plays where horizontal drilling, advanced fracture stimulation and enhanced recovery technologies provide the means to economically develop and produce oil and natural gas reserves from unconventional formations. The Company completed its initial public offering in May 2007.

Forward-Looking Information

This press release includes forward-looking information that is subject to a number of risks and uncertainties, many of which are beyond our control. All information, other than historical facts included in this press release, regarding our strategy, future operations, drilling plans, estimated reserves, future production, estimated capital expenditures, projected costs, the potential of drilling prospects and other plans and objectives of management are forward-looking information. All forward-looking statements speak only as of the date of this presentation. Although the Company believes that the plans, intentions and expectations reflected in or suggested by the forward-looking statements are reasonable, there is no assurance that these plans, intentions or expectations will be achieved. Actual results may differ materially from those anticipated due to many factors, including oil and natural gas prices, industry conditions, drilling results, uncertainties in estimating reserves, uncertainties in estimating future production from enhanced recovery operations, availability of drilling rigs and other services, availability of crude oil and natural gas transportation capacity, availability of capital resources and other factors listed in reports we have filed or may file with the Securities and Exchange Commission.

  CONTACT: Continental Resources, Inc.
           Don Fischbach, 580-548-5137
           donfischbach@contres.com



  Condensed Consolidated      Three months             Six months
  Statements of Operations   ended June 30,          ended June 30,
  (in thousands, except
  per share amounts)        2007        2006        2007         2006
                               (unaudited)             (unaudited)

  Revenues:
  Oil and natural
   gas sales              $140,046   $120,955     $256,030     $220,723
  Oil and natural gas
   service operations        5,280      4,146       10,419        8,143
  Total revenues           145,326    125,101      266,449      228,866

  Operating costs
   and expenses:
  Production expense        21,655     14,744       37,640       30,306
  Production tax             7,437      5,625       13,600        9,992
  Exploration expense        1,602      2,985        3,906        5,067
  Oil and gas service
   operations                3,134      2,663        6,353        4,781
  Depreciation, depletion,
   amortization and         23,330     14,689       43,738       27,981
   accretion
  Property impairments       5,923      6,318        8,893        7,733
  General and
   administrative (1)        8,450      9,458       21,423       22,151
  (Gain) loss on sale
   of assets                  (339)        15         (400)        (207)
  Total operating
   costs and expenses       71,192     56,497      135,153      107,804

  Income from operations    74,134     68,604      131,296      121,062
  Interest expense
   and other                (2,843)    (2,543)      (6,191)      (4,708)
  Net income before
   income tax expense       71,291     66,061      125,105      116,354

  Income tax expense:
    Current                 (1,502)         -       (1,502)           -
    Deferred               215,291          -      215,291            -
  Total income tax
   expense                 213,789          -      213,789            -

  Net income (loss)      $(142,498)   $66,061     $(88,684)    $116,354

  Basic net income
   (loss) per share         $(0.87)     $0.42       $(0.55)       $0.74
  Diluted net income
   (loss) per share         $(0.87)     $0.41       $(0.55)       $0.73

  Basic weighted average
   shares outstanding      162,933    158,058      160,651      158,058
  Diluted weighted average
   shares outstanding      162,933    159,685      160,651      159,685


  (1) Includes non-cash charges for stock-based compensation of $3.1 million
      and $3.9 million for the three months ended June 30, 2007 and 2006,
      respectively, and $10.9 million and $11.9 million for the six months
      ended June 30, 2007 and 2006, respectively.



  Condensed Consolidated Balance Sheets            June 30      December 31
  (in thousands)                                     2007           2006
                                                  (unaudited)

  Assets:
  Cash and cash equivalents                         $6,393         $7,018
  Receivables                                      118,681         89,086
  Inventories and other                             13,735          8,877
  Net property and equipment                       955,931        751,747
  Other assets                                       2,000          2,201
  Total assets                                  $1,096,740       $858,929

  Liabilities and shareholders' equity:
  Current liabilities                             $194,064       $188,637
  Long-term debt                                   137,500        140,000
  Other noncurrent liabilities                      43,854         39,831
  Deferred income taxes                            216,453              -
  Shareholders' equity                             504,869        490,461
  Total liabilities and shareholders' equity    $1,096,740       $858,929



  Condensed Consolidated Statements of Cash Flows     Six months ended
  (in thousands)                                          June 30,
                                                    2007            2006
                                                        (unaudited)

  Net income (loss)                              $(88,684)       $116,354
  Adjustments to reconcile net
   income (loss) to net cash provided
   by operating activities:
  Non-cash expenses                               278,965          50,760
  Changes in assets and liabilities               (26,772)          4,524
  Net cash provided by operating activities       163,509         171,638

  Net cash used in investing activities          (233,855)       (130,982)

  Net cash provided by (used in)
   financing activities                            69,619         (28,027)

  Effect of exchange rate on change
   in cash and cash equivalents                       102              41

  Net change in cash and cash equivalents            (625)         12,670
  Cash and cash equivalents at beginning
   of period                                        7,018           6,014
  Cash and cash equivalents at end of period       $6,393         $18,684



  Non-GAAP Financial Measures

EBITDAX represents earnings before interest expense, income taxes (when applicable), depreciation, depletion, amortization and accretion, property impairments, exploration expense and non-cash compensation expense. EBITDAX is not a measure of net income or cash flow as determined by generally accepted accounting principles (GAAP). EBITDAX should not be considered as an alternative to, or more meaningful than, net income or cash flow as determined in accordance with GAAP or as an indicator of a Company's operating performance or liquidity. Certain items excluded from EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of EBITDAX. The Company's computations of EBITDAX may not be comparable to other similarly titled measures of other companies. The Company believes that EBITDAX is a widely followed measure of operating performance and may also be used by investors to measure its ability to meet future debt service requirements, if any. The Company's credit facility requires that it maintain a total debt to EBITDAX ratio of no greater than 3.75 to 1 on a rolling four-quarter basis. The credit facility defines EBITDAX consistently with the definition of EBITDAX utilized and presented by the Company. The following table represents a reconciliation of the Company's net income loss to EBITDAX.

                          Three months ended        Six months ended
                               June 30,                 June 30,
  (in thousands)         2007           2006       2007          2006
                             (unaudited)               (unaudited)

  Net income (loss)   $(142,498)      $66,061    $(88,684)     $116,354
  Provision for
   income taxes         213,789             -     213,789             -
  Interest expense        3,427         2,936       7,080         5,421
  Depreciation,
   depletion,
   amortization
   and accretion         23,330        14,689      43,738        27,981
  Property impairments    5,923         6,318       8,893         7,733
  Exploration expense     1,602         2,985       3,906         5,067
  Equity compensation     3,086         3,900      10,933        11,950
  EBITDAX              $108,659       $96,889    $199,655      $174,506

First Call Analyst:
FCMN Contact:

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SOURCE: Continental Resources, Inc.

CONTACT: Don Fischbach of Continental Resources, Inc., +1-580-548-5137,
donfischbach@contres.com

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