Continental Resources Inc 10Q 2024 Q3 Quarterly report

Continental Resources Inc (CLR) 10-Q2024 Q3 Quarterly report

Content analysis

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________

FORM 10-Q

________________________________________

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-32886

____________________________________

CONTINENTAL RESOURCES, INC

(Exact name of registrant as specified in its charter)

____________________________________

(405) 234-9000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None

____________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No x

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	x	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of September 30, 2024, there are no publicly traded common shares of Continental Resources, Inc.

Table of Contents



PART I. Financial Information
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets	1
	Unaudited Condensed Consolidated Statements of Income	2
	Unaudited Condensed Consolidated Statements of Equity	3
	Unaudited Condensed Consolidated Statements of Cash Flows	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	26

PART II. Other Information
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	28
	Signature	29

When we refer to “us,” “we,” “our,” “Company,” or “Continental” we are describing Continental Resources, Inc. and our subsidiaries.

Glossary of Crude Oil and Natural Gas Terms

The terms defined in this section may be used throughout this report:

“Bbl” One stock tank barrel, of 42 U.S. gallons liquid volume, used herein in reference to crude oil, condensate or natural gas liquids.

“Boe” Barrels of crude oil equivalent, with six thousand cubic feet of natural gas being equivalent to one barrel of crude oil based on the average equivalent energy content of the two commodities.

“Btu” British thermal unit, which represents the amount of energy needed to heat one pound of water by one degree Fahrenheit and can be used to describe the energy content of fuels.

“MBbl” One thousand barrels of crude oil, condensate or natural gas liquids.

“MBoe” One thousand Boe.

“Mcf” One thousand cubic feet of natural gas.

“MMBoe” One million Boe.

“MMBtu” One million British thermal units.

“MMcf” One million cubic feet of natural gas.

“NGL” or “NGLs” Refers to natural gas liquids, which are hydrocarbon products that are separated during natural gas processing and include ethane, propane, isobutane, normal butane, and natural gasoline.

“NYMEX” The New York Mercantile Exchange.

“proved reserves” The quantities of crude oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs and under existing economic conditions, operating methods, and government regulations prior to the time at which contracts providing the right to operate expire, unless evidence indicates renewal is reasonably certain.

Cautionary Statement for the Purpose of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995

This report and information incorporated by reference in this report include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact, including, but not limited to, forecasts or expectations regarding the Company’s business and statements or information concerning the Company’s future operations, performance, financial condition, production and reserves, schedules, plans, timing of development, rates of return, budgets, costs, business strategy, objectives, and cash flows, included in this report are forward-looking statements. The words “could,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “budget,” “target,” “plan,” “continue,” “potential,” “guidance,” “strategy” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.

Forward-looking statements may include, but are not limited to, statements about:

•

our strategy;

•

our business and financial plans;

•

our future operations;

•

our proved reserves and related development plans;

•

technology;

•

future crude oil, natural gas liquids, and natural gas prices and differentials;

•

the timing and amount of future production of crude oil, natural gas liquids, and natural gas and flaring activities;

•

the amount, nature and timing of capital expenditures;

•

estimated revenues, expenses and results of operations;

•

drilling and completing of wells;

•

shutting in of production and the resumption of production activities;

•

competition;

•

marketing of crude oil, natural gas, and natural gas liquids;

•

transportation of crude oil, natural gas, and natural gas liquids to markets;

•

property exploitation, property acquisitions and dispositions, strategic investments, or joint development opportunities;

•

costs of exploiting and developing our properties and conducting other operations, including any impacts from inflation;

•

our financial position;

•

the timing and amount of debt borrowings or repayments;

•

the timing and amount of payments related to income taxes and payments the Company may be obligated to make pursuant to the stock redemption agreement described in Note 6. Fair Value Measurements—Stock Redemption Option.

•

current and potential litigation matters;

•

geopolitical events and conditions in, or affecting other, crude oil-producing and natural gas-producing nations;

•

credit markets;

•

our liquidity and access to capital;

•

the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving us and of scheduled or potential regulatory or legal changes;

•

our future operating and financial results;

•

our future commodity or other hedging arrangements; and

•

the ability and willingness of current or potential lenders, hedging contract counterparties, customers, and working interest owners to fulfill their obligations to us or to enter into transactions with us in the future on terms that are acceptable to us.

Forward-looking statements are based on the Company’s current expectations and assumptions about future events and currently available information as to the outcome and timing of future events. Although the Company believes these assumptions and expectations are reasonable, they are inherently subject to numerous business, economic, competitive, regulatory and other risks and uncertainties, most of which are difficult to predict and many of which are beyond the Company’s control. No assurance can be given that such expectations will be correct or achieved or that the assumptions are accurate or will not change over time. The risks and uncertainties that may affect the operations, performance and results of the business and forward-looking statements include, but are not limited to, those risk factors and other cautionary statements described under Part II, Item 1A. Risk Factors and elsewhere in this

report, if any, our Annual Report on Form 10-K for the year ended December 31, 2023, and other announcements we make from time to time.

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which such statement is made. Additionally, new factors emerge from time to time, and it is not possible for us to predict all such factors. Should one or more of the risks or uncertainties described in this report or our Annual Report on Form 10-K for the year ended December 31, 2023 occur, or should underlying assumptions prove incorrect, the Company’s actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements are expressly qualified in their entirety by this cautionary statement.

Except as expressly stated above or otherwise required by applicable law, the Company undertakes no obligation to publicly correct or update any forward-looking statement whether as a result of new information, future events or circumstances after the date of this report, or otherwise.

iii

PART I. Financial Information

ITEM 1. Financial Statements

Continental Resources, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets


	September 30, 2024			December 31, 2023
In thousands, except par values and share data	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	32,793		$	26,397
Receivables:
Crude oil, natural gas, and natural gas liquids sales		970,420			1,196,262
Joint interest and other		325,351			350,907
Allowance for credit losses		(3,915	)		(3,172	)
Receivables, net		1,291,856			1,543,997
Derivative assets		215,069			353,261
Inventories		193,246			190,762
Prepaid expenses and other		124,238			33,450
Total current assets		1,857,202			2,147,867
Net property and equipment, based on successful efforts method of accounting		19,729,508			19,786,889
Investment in unconsolidated affiliates		259,473			240,484
Operating lease right-of-use assets		24,976			38,656
Derivative assets, noncurrent		167,699			155,252
Other noncurrent assets		17,842			18,293
Total assets	$	22,056,700		$	22,387,441
Liabilities and equity
Current liabilities:
Accounts payable trade	$	912,138		$	835,012
Revenues and royalties payable		585,547			768,381
Accrued liabilities and other		343,136			354,537
Current portion of incentive compensation liability		66,498			130,583
Current portion of income tax liabilities		—			84,556
Derivative liabilities		2			—
Current portion of operating lease liabilities		7,823			18,112
Current portion of long-term debt		2,564			895,105
Total current liabilities		1,917,708			3,086,286
Long-term debt, net of current portion		4,963,111			5,734,007
Other noncurrent liabilities:
Deferred income tax liabilities, net		2,836,574			2,867,283
Incentive compensation liability, noncurrent		30,674			41,707
Asset retirement obligations, noncurrent		409,686			391,957
Derivative liabilities, noncurrent		—			586
Operating lease liabilities, noncurrent		16,064			19,482
Other noncurrent liabilities		387,791			36,346
Total other noncurrent liabilities		3,680,789			3,357,361
Commitments and contingencies (Note 8)
Equity:
Preferred stock, $0.01 par value; 25,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock, $0.01 par value; 1,000,000,000 shares authorized
299,610,267 shares issued and outstanding at September 30, 2024 and December 31, 2023		2,996			2,996
Retained earnings		11,131,184			9,850,687
Total shareholders’ equity attributable to Continental Resources		11,134,180			9,853,683
Noncontrolling interests		360,912			356,104
Total equity		11,495,092			10,209,787
Total liabilities and equity	$	22,056,700		$	22,387,441

The accompanying notes are an integral part of these condensed consolidated financial statements.

Continental Resources, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Income


	Three months ended September 30,						Nine months ended September 30,
In thousands, except per share data	2024			2023			2024			2023
Revenues:
Crude oil, natural gas, and natural gas liquids sales	$	1,711,932		$	2,082,331		$	5,523,563		$	5,663,672
Gain (loss) on derivative instruments, net		270,001			(335,111	)		161,536			270,795
Crude oil and natural gas service operations		24,207			30,119			68,532			73,716
Total revenues		2,006,140			1,777,339			5,753,631			6,008,183

Operating costs and expenses:
Production expenses		193,838			175,804			565,212			532,197
Production and ad valorem taxes		131,753			162,535			428,252			440,364
Transportation, gathering, processing, and compression		89,206			86,873			288,603			245,267
Exploration expenses		3,900			2,835			10,990			10,747
Crude oil and natural gas service operations		20,318			22,364			69,673			61,343
Depreciation, depletion, amortization and accretion		613,940			576,995			1,873,282			1,603,618
Property impairments		12,532			11,027			34,718			46,469
General and administrative expenses		64,630			112,368			211,554			230,752
Net (gain) loss on sale of assets and other		3,439			51,389			37,971			51,041
Total operating costs and expenses		1,133,556			1,202,190			3,520,255			3,221,798
Income from operations		872,584			575,149			2,233,376			2,786,385
Other income (expense):
Interest expense		(63,677	)		(100,885	)		(215,313	)		(306,014	)
Loss on extinguishment of debt		—			—			(1,600	)		—
Other		49,449			3,902			(331,632	)		8,561
		(14,228	)		(96,983	)		(548,545	)		(297,453	)
Income before income taxes		858,356			478,166			1,684,831			2,488,932
Provision for income taxes		(138,470	)		(105,994	)		(401,059	)		(539,139	)
Income before equity in net loss of affiliate		719,886			372,172			1,283,772			1,949,793
Equity in net loss of affiliate		(769	)		(883	)		(2,981	)		(2,041	)
Net income		719,117			371,289			1,280,791			1,947,752
Net income attributable to noncontrolling interests		60			501			333			1,854
Net income attributable to Continental Resources	$	719,057		$	370,788		$	1,280,458		$	1,945,898

The accompanying notes are an integral part of these condensed consolidated financial statements.

Continental Resources, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Equity


Three months ended September 30, 2024
	Shareholders’ equity attributable to Continental Resources
In thousands, except share data	Shares outstanding		Common stock		Retained earnings		Total shareholders’ equity of Continental Resources		Noncontrolling interests			Total equity
Balance at June 30, 2024		299,610,267	$	2,996	$	10,412,107	$	10,415,103	$	363,885		$	10,778,988
Net income		—		—		719,057		719,057		60			719,117
Change in dividends payable		—		—		20		20		—			20
Contributions from noncontrolling interests		—		—		—		—		2,149			2,149
Distributions to noncontrolling interests		—		—		—		—		(5,182	)		(5,182	)
Balance at September 30, 2024		299,610,267	$	2,996	$	11,131,184	$	11,134,180	$	360,912		$	11,495,092


Nine months ended September 30, 2024
	Shareholders’ equity attributable to Continental Resources
In thousands, except share data	Shares outstanding		Common stock		Retained earnings		Total shareholders’ equity of Continental Resources		Noncontrolling interests			Total equity
Balance at December 31, 2023		299,610,267	$	2,996	$	9,850,687	$	9,853,683	$	356,104		$	10,209,787
Net income		—		—		1,280,458		1,280,458		333			1,280,791
Change in dividends payable		—		—		39		39		—			39
Contributions from noncontrolling interests		—		—		—		—		21,745			21,745
Distributions to noncontrolling interests		—		—		—		—		(17,270	)		(17,270	)
Balance at September 30, 2024		299,610,267	$	2,996	$	11,131,184	$	11,134,180	$	360,912		$	11,495,092


Three months ended September 30, 2023
	Shareholders’ equity attributable to Continental Resources
In thousands, except share data	Shares outstanding		Common stock		Retained earnings		Total shareholders’ equity of Continental Resources		Noncontrolling interests			Total equity
Balance at June 30, 2023		299,610,267	$	2,996	$	8,329,936	$	8,332,932	$	362,513		$	8,695,445
Net income		—		—		370,788		370,788		501			371,289
Change in dividends payable		—		—		—		—		—			—
Contributions from noncontrolling interests		—		—		—		—		2,636			2,636
Distributions to noncontrolling interests		—		—		—		—		(5,341	)		(5,341	)
Balance at September 30, 2023		299,610,267	$	2,996	$	8,700,724	$	8,703,720	$	360,309		$	9,064,029

The accompanying notes are an integral part of these condensed consolidated financial statements.

Continental Resources, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Equity (Continued)


Nine months ended September 30, 2023
	Shareholders’ equity attributable to Continental Resources
In thousands, except share data	Shares outstanding		Common stock		Retained earnings		Total shareholders’ equity of Continental Resources		Noncontrolling interests			Total equity
Balance at December 31, 2022		299,610,267	$	2,996	$	6,754,174	$	6,757,170	$	372,438		$	7,129,608
Net income		—		—		1,945,898		1,945,898		1,854			1,947,752
Change in dividends payable		—		—		652		652		—			652
Contributions from noncontrolling interests		—		—		—		—		8,809			8,809
Distributions to noncontrolling interests		—		—		—		—		(22,792	)		(22,792	)
Balance at September 30, 2023		299,610,267	$	2,996	$	8,700,724	$	8,703,720	$	360,309		$	9,064,029

The accompanying notes are an integral part of these condensed consolidated financial statements.

Continental Resources, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows


	Nine months ended September 30,
In thousands	2024			2023
Cash flows from operating activities
Net income	$	1,280,791		$	1,947,752
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion		1,867,675			1,607,034
Property impairments		34,718			46,469
Non-cash (gain) loss on derivatives		125,161			(61,371	)
Provision (benefit) for deferred income taxes		(30,710	)		168,368
Equity in net loss of affiliate		2,981			2,041
Net (gain) loss on sale of assets		36,401			51,041
Loss on extinguishment of debt		1,600			—
Other, net		379,049			11,547
Changes in assets and liabilities:
Accounts receivable		250,153			65,699
Inventories		(2,406	)		(34,626	)
Other current assets		(90,196	)		(2,955	)
Accounts payable trade		53,685			(30,138	)
Revenues and royalties payable		(182,764	)		(31,810	)
Accrued liabilities and other		(13,501	)		(11,837	)
Incentive compensation liability		(75,118	)		(57,399	)
Current income taxes liability		(84,556	)		(85,482	)
Other noncurrent assets and liabilities		(18,855	)		(14,976	)
Net cash provided by operating activities		3,534,108			3,569,357
Cash flows from investing activities
Exploration and development		(2,142,748	)		(2,798,272	)
Purchase of producing crude oil and natural gas properties		(1,246	)		(162,022	)
Purchase of other property and equipment		(161,188	)		(169,649	)
Proceeds from sale of assets		467,048			377,428
Contributions to unconsolidated affiliates		(21,473	)		(18,624	)
Net cash used in investing activities		(1,859,607	)		(2,771,139	)
Cash flows from financing activities
Credit facility borrowings		3,016,000			4,084,000
Repayment of credit facility		(3,041,000	)		(4,313,000	)
Redemption of senior notes		(893,126	)		(636,000	)
Repayment of other debt		(751,863	)		(1,799	)
Debt issuance costs		—			(242	)
Contributions from noncontrolling interests		21,560			7,666
Distributions to noncontrolling interests		(17,334	)		(25,326	)
Dividends paid on common stock		(2,342	)		(2,052	)
Net cash used in financing activities		(1,668,105	)		(886,753	)
Net change in cash and cash equivalents		6,396			(88,535	)
Cash and cash equivalents at beginning of period		26,397			137,788
Cash and cash equivalents at end of period	$	32,793		$	49,253

The accompanying notes are an integral part of these condensed consolidated financial statements.

Continental Resources, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1. Organization and Nature of Business

Nature of Business

Continental Resources, Inc. (the “Company”) was formed in 1967 and is incorporated under the laws of the State of Oklahoma. The Company’s principal business is the exploration, development, management, and production of crude oil and natural gas and associated products with properties primarily located in four leading basins in the United States – the Bakken field of North Dakota and Montana, the Anadarko Basin of Oklahoma, the Permian Basin of Texas, and the Powder River Basin of Wyoming. Additionally, the Company pursues the acquisition and management of perpetually owned minerals located in certain of its key operating areas. For the nine months ended September 30, 2024, crude oil accounted for 54% of the Company’s total production and 88% of its crude oil, natural gas, and natural gas liquids revenues.

Voluntary Filer

The Company is privately owned by its founder, Harold G. Hamm, certain members of his family and their affiliated entities (the “Hamm Family”). As of September 30, 2024, the Hamm Family holds approximately 299.6 million shares of common stock of the Company. As a privately held company, certain of the corporate governance, disclosure, and other provisions applicable to a company with listed equity securities and reporting obligations under the Securities Exchange Act of 1934 do not apply to us. We continue to furnish Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K with the SEC as required by our senior note indentures.

Note 2. Basis of Presentation and Significant Accounting Policies

Basis of presentation

The condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and entities in which the Company has a controlling financial interest. Intercompany accounts and transactions have been eliminated upon consolidation. Noncontrolling interests reflected herein represent third party ownership in the net assets of consolidated subsidiaries. The portions of consolidated net income and equity attributable to the noncontrolling interests are presented separately in the Company’s financial statements.

Investments in entities in which the Company has the ability to exercise significant influence, but does not control, are accounted for using the equity method of accounting. In applying the equity method, the investments are initially recognized at cost and are subsequently adjusted for the Company's proportionate share of earnings, losses, contributions, and distributions, as applicable.

This report has been prepared pursuant to rules and regulations applicable to interim financial information. Because this is an interim period filing presented using a condensed format, it does not include all disclosures required by accounting principles generally accepted in the United States (“U.S. GAAP”), although the Company believes the disclosures are adequate to make the information not misleading. You should read this Quarterly Report on Form 10-Q (“Form 10-Q”) together with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”), which includes a summary of the Company’s significant accounting policies and other disclosures.

The condensed consolidated financial statements as of September 30, 2024 and for the three and nine month periods ended September 30, 2024 and 2023 are unaudited. The condensed consolidated balance sheet as of December 31, 2023 was derived from the audited balance sheet included in the 2023 Form 10-K. The Company evaluated its September 30, 2024 financial statements for subsequent events through November 12, 2024, the date the financial statements were available to be issued.

Continental Resources, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure and estimation of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from those estimates. The most significant estimates and assumptions impacting reported results are estimates of the Company’s crude oil and natural gas reserves, which are used to compute depreciation, depletion, amortization and impairment of proved crude oil and natural gas properties. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation in accordance with U.S. GAAP have been included in these unaudited condensed consolidated financial statements. The results of operations for any interim period are not necessarily indicative of the results of operations that may be expected for any other interim period or for an entire year.

Note 3. Supplemental Cash Flow Information

The following table discloses supplemental cash flow information about cash paid for interest and income tax payments and refunds. Also disclosed is information about investing activities that affects recognized assets and liabilities but does not result in cash receipts or payments.


	Nine months ended September 30,
In thousands	2024		2023
Supplemental cash flow information:
Cash paid for interest	$	227,609	$	303,011
Cash paid for income taxes (1)		614,401		456,253
Cash received for income tax refunds		3,266		2
Non-cash investing activities:
Asset retirement obligation additions and revisions, net		15,785		9,057

(1)

Amounts represent estimated quarterly payments for U.S. federal and state income taxes based on estimates of taxable income for the year.

As of September 30, 2024 and December 31, 2023, the Company had $386.2 million and $367.2 million, respectively, of accrued capital expenditures included in “Net property and equipment” with an offsetting amount in “Accounts payable trade” in the condensed consolidated balance sheets.

Note 4. Revenues

The following table presents the disaggregation of the Company's crude oil and natural gas revenues by operating area for the three and nine months ended September 30, 2024 and 2023. Sales of natural gas and NGLs are combined, as a substantial majority of the Company's natural gas sales contracts represent wellhead sales of unprocessed gas.


	Three months ended September 30, 2024						Three months ended September 30, 2023
In thousands	Crude Oil		Natural Gas and NGLs		Total		Crude Oil		Natural Gas and NGLs		Total
Bakken	$	835,950	$	51,336	$	887,286	$	1,089,502	$	79,952	$	1,169,454
Anadarko Basin		213,883		112,981		326,864		288,993		168,442		457,435
Powder River Basin		92,570		8,429		100,999		106,407		9,333		115,740
Permian Basin		349,384		11,537		360,921		269,787		23,960		293,747
All other		35,838		24		35,862		45,921		34		45,955
Crude oil, natural gas, and natural gas liquids sales	$	1,527,625	$	184,307	$	1,711,932	$	1,800,610	$	281,721	$	2,082,331

Continental Resources, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements


	Nine months ended September 30, 2024						Nine months ended September 30, 2023
In thousands	Crude Oil		Natural Gas and NGLs		Total		Crude Oil		Natural Gas and NGLs		Total
Bakken	$	2,634,637	$	192,682	$	2,827,319	$	2,732,748	$	292,621	$	3,025,369
Anadarko Basin		729,908		386,280		1,116,188		754,983		527,240		1,282,223
Powder River Basin		315,112		30,864		345,976		302,577		31,437		334,014
Permian Basin		1,073,837		42,798		1,116,635		826,361		59,666		886,027
All other		117,371		74		117,445		135,903		136		136,039
Crude oil, natural gas, and natural gas liquids sales	$	4,870,865	$	652,698	$	5,523,563	$	4,752,572	$	911,100	$	5,663,672

Note 5. Derivative Instruments

From time to time the Company enters into derivative contracts to economically hedge against the variability in cash flows associated with future sales of production. The Company recognizes its derivative instruments on the balance sheet as either assets or liabilities measured at fair value. The estimated fair value is based upon various factors, as described in Note 6. Fair Value Measurements.

At September 30, 2024 the Company had outstanding derivative contracts as set forth in the tables below.


Natural gas derivatives
Period and Type of Contract	Average Volumes Hedged			Weighted Average Hedge Price ($/MMBtu)
October 2024 - December 2024
Swaps - Henry Hub		697,000	MMBtus/day	$	3.38
January 2025 - December 2025
Swaps - Henry Hub		602,000	MMBtus/day	$	3.90
January 2026 - December 2026				.
Swaps - Henry Hub		635,000	MMBtus/day	$	4.11
January 2027 - December 2027
Swaps - Henry Hub		613,000	MMBtus/day	$	3.92

Crude oil derivatives

Weighted Average
Hedge Price ($/Bbl)

Period and Type of Contract

Average Volumes Hedged

Roll Swaps

Fixed Swaps

October 2024 - December 2024

Roll Swaps - NYMEX

60,000

Bbls/day

0.73

Fixed Swaps - WTI

83,000

Bbls/day

77.55

January 2025 - February 2025

Fixed Swaps - WTI

24,000

Bbls/day

80.25

Continental Resources, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

Derivative gains and losses

Cash receipts and payments in the following table reflect the gains or losses on derivative contracts which matured during the applicable period, calculated as the difference between the contract price and the market settlement price of matured contracts. The Company's derivative contracts are settled based upon reported settlement prices on commodity exchanges, with crude oil derivative settlements based on NYMEX West Texas Intermediate (“WTI”) pricing and natural gas derivative settlements based primarily on NYMEX Henry Hub pricing. Non-cash gains and losses below represent the change in fair value of derivative instruments which continued to be held at period end and the reversal of previously recognized non-cash gains or losses on derivative contracts that matured during the period.


	Three months ended September 30,						Nine months ended September 30,
In thousands	2024			2023			2024			2023
Cash received (paid) on derivatives:
Crude oil fixed price swaps	$	18,258		$	(24,416	)	$	3,410		$	15,335
Crude oil NYMEX roll swaps		(1,957	)		976			76			3,542
Natural gas basis swaps		—			960			—			2,942
Natural gas WAHA swaps		13,262			3,384			40,184			12,747
Natural gas fixed price swaps		74,480			53,110			226,958			146,737
Natural gas collars		—			—			16,069			24,380
Natural gas 3-way collars		—			—			—			3,741
Cash received on derivatives, net		104,043			34,014			286,697			209,424
Non-cash gain (loss) on derivatives:
Crude oil fixed price swaps		113,723			(344,555	)		(53,757	)		(191,926	)
Crude oil NYMEX roll swaps		1,851			(7,006	)		(6,825	)		(7,723	)
Natural gas basis swaps		—			(806	)		—			(7,407	)
Natural gas WAHA swaps		(8,348	)		3,193			(21,523	)		(7,566	)
Natural gas fixed price swaps		58,732			(24,707	)		(31,133	)		241,284
Natural gas collars		—			4,756			(11,923	)		35,307
Natural gas 3-way collars		—			—			—			(598	)
Non-cash gain (loss) on derivatives, net		165,958			(369,125	)		(125,161	)		61,371
Gain (loss) on derivative instruments, net	$	270,001		$	(335,111	)	$	161,536		$	270,795

Balance sheet offsetting of derivative assets and liabilities

The Company’s derivative contracts are recorded at fair value in the condensed consolidated balance sheets under the captions “Derivative assets,” “Derivative assets, noncurrent,” “Derivative liabilities,” and “Derivative liabilities, noncurrent” as applicable. Derivative assets and liabilities with the same counterparty that are subject to contractual terms which provide for net settlement are reported on a net basis in the condensed consolidated balance sheets.

The following table presents the gross amounts of recognized derivative assets and liabilities, as applicable, the amounts offset under netting arrangements with counterparties, and the resulting net amounts presented in the condensed consolidated balance sheets for the periods presented, all at fair value.


In thousands	September 30, 2024			December 31, 2023
Commodity derivative assets:
Gross amounts of recognized assets	$	385,901		$	510,375
Gross amounts offset on balance sheet		(3,133	)		(1,862	)
Net amounts of assets on balance sheet		382,768			508,513
Commodity derivative liabilities:
Gross amounts of recognized liabilities		(3,135	)		(2,448	)
Gross amounts offset on balance sheet		3,133			1,862
Net amounts of liabilities on balance sheet	$	(2	)	$	(586	)

Continental Resources, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

The following table reconciles the net amounts disclosed above to the individual financial statement line items in the condensed consolidated balance sheets.


In thousands	September 30, 2024			December 31, 2023
Derivative assets	$	215,069		$	353,261
Derivative assets, noncurrent		167,699			155,252
Net amounts of assets on balance sheet		382,768			508,513
Derivative liabilities		(2	)		—
Derivative liabilities, noncurrent		—			(586	)
Net amounts of liabilities on balance sheet		(2	)		(586	)
Total derivative assets (liabilities), net	$	382,766		$	507,927

Note 6. Fair Value Measurements

Derivative Instruments

The Company's derivative instruments are reported at fair value on a recurring basis. In determining the fair values of swap contracts, a discounted cash flow method is used due to the unavailability of relevant comparable market data for the Company’s exact contracts. The discounted cash flow method estimates future cash flows based on quoted market prices for forward commodity prices and a risk-adjusted discount rate. The fair values of swap contracts are calculated mainly using significant observable inputs (Level 2). Calculation of the fair values of collars requires the use of an industry-standard option pricing model that considers various inputs including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. These assumptions are observable in the marketplace or can be corroborated by active markets or broker quotes and are therefore designated as Level 2 within the valuation hierarchy. The Company’s calculation of fair value for each of its derivative positions is compared to the counterparty valuation for reasonableness.

The following tables summarize the valuation of derivative instruments by pricing levels that were accounted for at fair value on a recurring basis as of September 30, 2024 and December 31, 2023.


	Fair value measurements at September 30, 2024 using:
In thousands	Level 1		Level 2		Level 3		Total
Derivative assets (liabilities):
Crude oil fixed price swaps	$	—	$	92,488	$	—	$	92,488
Crude oil NYMEX roll swaps		—		62		—		62
Natural gas WAHA swaps		—		—		—		—
Natural gas fixed price swaps		—		290,216		—		290,216
Natural gas collars		—		—		—		—
Total	$	—	$	382,766	$	—	$	382,766


	Fair value measurements at December 31, 2023 using:
In thousands	Level 1		Level 2		Level 3		Total
Derivative assets (liabilities):
Crude oil fixed price swaps	$	—	$	146,243	$	—	$	146,243
Crude oil NYMEX roll swaps		—		6,888		—		6,888
Natural gas WAHA swaps		—		21,523		—		21,523
Natural gas fixed price swaps		—		321,350		—		321,350
Natural gas collars		—		11,923		—		11,923
Total	$	—	$	507,927	$	—	$	507,927

Continental Resources, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

Stock Redemption Option

In conjunction with estate planning for Harold G. Hamm, in June 2024 Continental entered into a Redemption Agreement with Mr. Hamm and certain members of his family whereby, following Mr. Hamm’s passing, his estate may, but is not obligated to, elect from time-to-time to require Continental to redeem sufficient shares to enable the estate to fund the payment of estate taxes and interest as they become due. Mr. Hamm’s potential estate tax liability is expected to be primarily based on the fair market value his estate assigns to his Continental stock at the time of passing. Mr. Hamm currently owns approximately 52% of Continental’s outstanding common stock. The future value of Continental and resulting estate tax liability are subject to numerous uncertainties and cannot be reasonably quantified at present. The agreement contemplates that Mr. Hamm’s estate will defer and pay the potential estate taxes and related interest in installments over a period of up to 14 years as permitted by the Internal Revenue Code, with the first five years being comprised of interest-only payments and the remaining nine years being comprised of principal and interest payments. Assuming the estate elects to exercise its redemption rights, Continental’s potential obligations are expected to occur over the same 14 year period in conjunction with the estate’s installment payments. The redemption agreement has no specified number of shares to be redeemed, no specified share repurchase price, no fixed duration of time, and no determinable cash outflows, all of which are unknown and subject to change based on the tax laws in effect and the value of Continental to be determined after Mr. Hamm’s passing. Although the timing and amount of Continental’s potential obligations under the agreement cannot be reasonably quantified, at September 30, 2024 the Company has recognized a $342 million liability on its balance sheet within the caption “Other noncurrent liabilities” with a corresponding charge to "Other income (expense)—Other” on the statement of income for the nine months ended September 30, 2024 to reflect the intrinsic value of the redemption optionality features contained in the arrangement pursuant to ASC Topic 820, Fair Value Measurement. Such value was determined using simulation models that consider various unobservable inputs and thus represents a Level 3 measurement under the ASC 820 valuation hierarchy.

Note 7. Debt

The Company's debt, net of unamortized discounts, premiums, and debt issuance costs totaling $35.2 million and $41.7 million at September 30, 2024 and December 31, 2023, respectively, consists of the following.


In thousands	September 30, 2024		December 31, 2023
Credit facility	$	185,000	$	210,000
Term Loan		—		748,092
Notes payable		15,789		17,642
3.8% Senior Notes due 2024		—		892,610
2.268% Senior Notes due 2026		796,674		795,541
4.375% Senior Notes due 2028		995,303		994,327
5.75% Senior Notes due 2031		1,486,737		1,485,460
2.875% Senior Notes due 2032		793,546		792,977
4.9% Senior Notes due 2044		692,626		692,463
Total debt	$	4,965,675	$	6,629,112
Less: Current portion of long-term debt		2,564		895,105
Long-term debt, net of current portion	$	4,963,111	$	5,734,007

Credit Facility

At September 30, 2024 the Company had a credit facility, maturing in October 2026, with aggregate lender commitments totaling $2.255 billion. On October 29, 2024, the Company replaced the prior facility with a new facility containing substantially the same terms as the prior facility with the exception of the change to the terms governing the calculation described under “New Facility” below. The New Facility extended the maturity date to October 2029 and reduced the aggregate lender commitments to $1.80 billion. The New Facility also revised the financial covenant calculation for consolidated net debt to total capitalization to exclude certain accounting impacts of the Redemption Agreement described in Note 6. Fair Value Measurements—Stock Redemption Option. The New Facility remains unsecured and has no borrowing base requirement subject to redetermination.

Continental Resources, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

The Company had $185 million of outstanding borrowings on its credit facility at September 30, 2024. Credit facility borrowings bear interest at market-based interest rates plus a margin based on the terms of the borrowing and the credit ratings assigned to the Company’s senior, unsecured, long-term indebtedness. The weighted-average interest rate on outstanding credit facility borrowings at September 30, 2024 was 6.7%. The Company incurs commitment fees based on currently assigned credit ratings of 0.20% per annum on the daily average amount of unused borrowing availability.

The New Facility contains certain restrictive covenants, including a requirement that the Company maintain a consolidated net debt to total capitalization ratio of no greater than 0.65 to 1.00, which is unchanged from the prior credit facility. This ratio represents the ratio of (a) net debt (calculated as total face value of debt plus outstanding letters of credit less cash and cash equivalents) divided by (b) the sum of net debt plus total shareholders' equity (i) plus, to the extent resulting in a reduction of total shareholders’ equity, the amount of any non-cash impairment charges incurred, net of any tax effect, after June 30, 2014 and (ii) plus (to the extent resulting in a reduction of total shareholders’ equity) or minus (to the extent resulting in an increase of total shareholders’ equity), as applicable, the amount of the non-cash impact of the accounting treatment for the Redemption Agreement. The Company was in compliance with the credit facility covenants at September 30, 2024.

Senior Notes

The following table summarizes the face values, maturity dates, semi-annual interest payment dates, and optional redemption periods related to the Company’s outstanding senior note obligations at September 30, 2024.

2026 Notes

2028 Notes

2031 Notes

2032 Notes

2044 Notes

Face value (in thousands)

800,000

1,000,000

1,500,000

800,000

700,000

Maturity date

November 15, 2026

January 15, 2028

January 15, 2031

April 1, 2032

June 1, 2044

Interest payment dates

May 15, Nov 15

Jan 15, July 15

April 1, Oct 1

June 1, Dec 1

Make-whole redemption period (1)

Nov 15, 2023

Oct 15, 2027

July 15, 2030

January 1, 2032

Dec 1, 2043

(1)

At any time prior to the indicated dates, the Company has the option to redeem all or a portion of its senior notes of the applicable series at the “make-whole” redemption amounts specified in the respective senior note indentures plus any accrued and unpaid interest to the date of redemption. On or after the indicated dates, the Company may redeem all or a portion of its senior notes at a redemption amount equal to 100% of the principal amount of the senior notes being redeemed plus any accrued and unpaid interest to the date of redemption.

The Company’s senior notes are not subject to any mandatory redemption or sinking fund requirements.

The indentures governing the Company’s senior notes contain covenants that, among other things, limit the Company’s ability to create liens securing certain indebtedness, enter into certain sale-leaseback transactions, or consolidate, merge or transfer certain assets. These covenants are subject to a number of important exceptions and qualifications. The Company was in compliance with these covenants at September 30, 2024.

The senior notes are obligations of Continental Resources, Inc. Additionally, certain of the Company’s wholly-owned subsidiaries (Banner Pipeline Company, L.L.C., CLR Asset Holdings, LLC, The Mineral Resources Company, SCS1 Holdings LLC, Continental Innovations LLC, Jagged Peak Energy LLC, and Parsley SoDe Water LLC) fully and unconditionally guarantee the senior notes on a joint and several basis. The financial information of the guarantor group is not materially different from the consolidated financial statements of the Company. The Company’s other subsidiaries, whose assets, equity, and results of operations attributable to the Company are not material, do not guarantee the senior notes.

Continental Resources, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

Redemption of Senior Notes

In June 2024, the Company repaid its outstanding $893.1 million of 2024 Notes that were scheduled to mature on June 1, 2024. The redemption price was equal to 100% of the principal amount plus accrued and unpaid interest to the redemption date. The aggregate of the principal amount and accrued interest paid upon redemption was $910.1 million.

Repayment of Term Loan

In November 2022, the Company borrowed $750 million under a three-year term loan agreement that was scheduled to mature in November 2025. The Company repaid $100 million of the term loan during the three months ended March 31, 2024 and repaid the remaining $650 million during the three months ended June 30, 2024.

Note 8. Commitments and Contingencies

Transportation, gathering, and processing commitments – The Company has entered into transportation, gathering, and processing commitments to guarantee capacity on crude oil and natural gas pipelines and natural gas processing facilities. Certain of the commitments, which have varying terms extending as far as 2031, require the Company to pay per-unit transportation, gathering, or processing charges regardless of the amount of capacity used. Future commitments remaining as of September 30, 2024 under the arrangements amount to approximately $868 million, of which $88 million is expected to be incurred in the remainder of 2024, $281 million in 2025, $218 million in 2026, $203 million in 2027, $70 million in 2028, and $8 million thereafter. A portion of these future costs will be borne by other interest owners. The Company is not committed under the above contracts to deliver fixed and determinable quantities of crude oil or natural gas in the future. These commitments do not qualify as leases under ASC Topic 842 and are not recognized on the Company's balance sheet.

Litigation pertaining to 2022 take-private transaction

In April 2023, three separate putative class action lawsuits were consolidated under the caption In re Continental Resources, Inc. Shareholder Litigation, Case No. CJ-2022-4162, in the District Court of Oklahoma County, Oklahoma (the “Consolidated Action”). In the Consolidated Action, the plaintiffs, on behalf of themselves and all other similarly situated former shareholders of the Company, allege that Mr. Hamm, certain trusts established for the benefit of Mr. Hamm and/or his family members, and the Company’s other directors breached their fiduciary duties in connection with the take-private transaction and seek: (i) monetary damages; (ii) the costs and expenses associated with the lawsuits; and (iii) other equitable relief. The defendants continue to vigorously defend themselves against these claims.

In January 2023, FourWorld Deep Value Opportunities Fund I, LLC, FourWorld Event Opportunities, LP, FW Deep Value Opportunities I, LLC, FourWorld Global Opportunities Fund, Ltd., FourWorld Special Opportunities Fund, LLC, Corbin ERISA Opportunity Fund Ltd., and Quadre Investments, L.P. (collectively, “FourWorld”), all former shareholders of the Company, filed a petition in the District Court of Oklahoma County, Oklahoma, seeking appraisal of their respective shares of the Company’s common stock in connection with the take-private transaction. In April 2024, Quadre Investments, L.P. filed a voluntary dismissal with prejudice. The Company continues to vigorously defend itself against these claims.

Continental Resources, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

Note 9. Long-Term Incentive Compensation

The Company has granted incentive compensation awards to employees pursuant to the Continental Resources, Inc. 2022 Long-Term Incentive Plan. Awards granted prior to 2024 generally vest after three years of employee service. Awards granted in 2024 and thereafter generally vest annually, in one-third increments, over three years of employee service. The Company intends to settle all outstanding incentive awards vesting in the future in cash and, thus, the awards are classified as liability awards pursuant to ASC Topic 718, Compensation—Stock Compensation.

At September 30, 2024, the Company had recorded a current liability of $66.5 million and a non-current liability of $30.7 million in the captions “Current portion of incentive compensation liability” and “Incentive compensation liability, noncurrent,” respectively, in the condensed consolidated balance sheets associated with the awards. Such amounts reflect the Company’s estimate of expected future cash payments multiplied by the percentage of requisite service periods that employees have completed as of September 30, 2024. The Company’s compensation expense associated with such awards totaled $15.9 million and $61.4 million for the three months ended September 30, 2024 and 2023, respectively, and $69.2 million and $86.9 million for the nine months ended September 30, 2024 and 2023, respectively, which is included in the caption “General and administrative expenses” in the condensed consolidated statements of income. As of September 30, 2024, there was approximately $92.0 million of unrecognized liabilities and compensation expense related to unvested awards, which are expected to be recognized over a weighted average period of 1.3 years.

The Company’s incentive compensation liability will be remeasured each reporting period leading up to the applicable award vesting dates to reflect additional service rendered by employees and to reflect changes in expected cash payments arising from underlying changes in the value of the Company based on independent third party appraisals. Changes in the liability will be recorded as increases or decreases to compensation expense. The Company has estimated the number of forfeitures expected to occur in determining the amount of liability and expense to recognize.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this report and our historical consolidated financial statements and notes included in our Form 10-K for the year ended December 31, 2023.

The following discussion and analysis includes forward-looking statements and should be read in conjunction with the risk factors described in Part II, Item 1A. Risk Factors included in this report, if any, and in our Form 10-K for the year ended December 31, 2023, along with Cautionary Statement for the Purpose of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995 at the beginning of this report, for information about the risks and uncertainties that could cause our actual results to be materially different than our forward-looking statements.

Overview

We are an independent crude oil and natural gas company engaged in the exploration, development, management, and production of crude oil and natural gas and associated products with properties primarily located in four leading basins in the United States – the Bakken field of North Dakota and Montana, the Anadarko Basin of Oklahoma, the Permian Basin of Texas, and the Powder River Basin of Wyoming. Additionally, we pursue the acquisition and management of perpetually owned minerals located in certain of our key operating areas. We derive the majority of our operating income and cash flows from the sale of crude oil, natural gas, and natural gas liquids and expect this to continue in the future. As discussed in Note 1. Organization and Nature of Business—Voluntary Filer in Notes to Unaudited Condensed Consolidated Financial Statements, Continental Resources, Inc. is a privately held corporation and has no publicly available common shares outstanding.

Third Quarter 2024 Financial and Operating Metrics

Commodity prices have remained volatile due to various factors, some of which include global supply and demand, global inventory levels, and regional conflicts. Average NYMEX oil and natural gas prices for the periods presented are shown in the table below.


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Average NYMEX prices:
WTI Crude oil ($/Bbl)	$	76.43	$	82.25	$	78.58	$	77.27
Henry Hub natural gas ($/Mcf)	$	2.11	$	2.59	$	2.11	$	2.46

The following table contains financial and operating metrics for the periods presented. Average sales prices exclude any effect of derivative transactions. Per-unit expenses have been calculated using sales volumes.


	Three months ended September 30,						Nine months ended September 30,
	2024			2023			2024			2023
Average daily production:
Crude oil (Bbl per day)		218,196			240,205			229,210			227,464
Natural gas (Mcf per day) (1)		1,147,213			1,292,533			1,187,829			1,247,358
Crude oil equivalents (Boe per day)		409,398			455,627			427,181			435,357
Average sales prices:
Crude oil ($/Bbl)	$	74.80		$	81.99		$	77.02		$	76.93
Natural gas ($/Mcf) (1)	$	1.75		$	2.37		$	2.01		$	2.68
Production expenses ($/Boe)	$	5.10		$	4.21		$	4.81		$	4.49
Production and ad valorem taxes (% of net crude oil and natural gas sales)		8.1	%		8.1	%		8.2	%		8.1	%
Depreciation, depletion, amortization and accretion ($/Boe)	$	16.15		$	13.81		$	15.94		$	13.53
Total general and administrative expenses ($/Boe)	$	1.70		$	2.69		$	1.80		$	1.95

(1)

Natural gas production volumes, sales volumes, and sales prices presented throughout management's discussion and analysis reflect the combined value for natural gas and natural gas liquids.

Three months ended September 30, 2024 compared to the three months ended September 30, 2023

Results of Operations

The following table presents selected financial and operating information for the periods presented.


	Three months ended September 30,
In thousands	2024			2023
Crude oil, natural gas, and natural gas liquids sales	$	1,711,932		$	2,082,331
Gain (loss) on derivative instruments, net		270,001			(335,111	)
Crude oil and natural gas service operations		24,207			30,119
Total revenues		2,006,140			1,777,339
Operating costs and expenses		(1,133,556	)		(1,202,190	)
Other expenses, net		(14,228	)		(96,983	)
Income before income taxes		858,356			478,166
Provision for income taxes		(138,470	)		(105,994	)
Income before equity in net loss of affiliate		719,886			372,172
Equity in net loss of affiliate		(769	)		(883	)
Net income		719,117			371,289
Net income attributable to noncontrolling interests		60			501
Net income attributable to Continental Resources	$	719,057		$	370,788
Production volumes:
Crude oil (MBbl)		20,074			22,099
Natural gas (MMcf)		105,544			118,913
Crude oil equivalents (MBoe)		37,665			41,918
Sales volumes:
Crude oil (MBbl)		20,424			21,960
Natural gas (MMcf)		105,544			118,913
Crude oil equivalents (MBoe)		38,014			41,779

Production

The following table summarizes the changes in our average daily Boe production by major operating area for the third quarter period.


Boe production per day	3Q 2024		3Q 2023		% Change
Bakken		191,784		214,551		(11	)%
Anadarko Basin		121,578		159,090		(24	)%
Powder River Basin		22,273		22,750		(2	)%
Permian Basin		68,562		53,646		28	%
All other		5,201		5,590		(7	)%
Total		409,398		455,627		(10	)%

The following table summarizes the changes in our production by product for the third quarter period.


	Three months ended September 30,													Volume
	2024					2023					Volume			percent
	Volume		Percent			Volume		Percent			change			change
Crude oil (MBbl)		20,074		53	%		22,099		53	%		(2,025	)		(9	)%
Natural gas (MMcf)		105,544		47	%		118,913		47	%		(13,369	)		(11	)%
Total (MBoe)		37,665		100	%		41,918		100	%		(4,253	)		(10	)%

The 9% decrease in crude oil production and 11% decrease in natural gas production in the 2024 third quarter were primarily driven by natural declines in production coupled with planned moderation in capital spending, asset divestitures, and variation in the timing of new well completions compared to the prior period.

Revenues

Our revenues consist of sales of crude oil, natural gas, and natural gas liquids, gains and losses resulting from changes in the fair value of our derivative instruments, and revenues associated with crude oil and natural gas service operations.

Crude oil, natural gas, and natural gas liquids sales. Sales totaled $1.71 billion for the third quarter of 2024, an 18% decrease compared to sales of $2.08 billion for the third quarter of 2023 due to decreases in crude oil and natural gas sales prices coupled with a decrease in sales volumes as discussed below.

Total sales volumes for the third quarter of 2024 decreased 3,765 MBoe, or 9%, compared to the third quarter of 2023 due to the previously described decrease in production volumes. For the third quarter of 2024, our crude oil sales volumes decreased 7% and our natural gas sales volumes decreased 11% compared to the third quarter of 2023.

Our crude oil sales prices averaged $74.80 per barrel in the third quarter of 2024 compared to $81.99 per barrel for the third quarter of 2023. Our natural gas sales prices averaged $1.75 per Mcf for the third quarter of 2024 compared to $2.37 per Mcf for the third quarter of 2023.

Derivatives. Changes in settled and future commodity prices during the third quarter of 2024 had a net favorable impact on the fair value of our derivatives, which resulted in positive revenue adjustments totaling $270.0 million for the period, representing $104.0 million of cash gains and $166.0 million of unsettled non-cash gains, compared to negative revenue adjustments totaling $335.1 million in the third quarter of 2023.

Operating Costs and Expenses

Production Expenses. Production expenses increased $18.0 million, or 10%, to $193.8 million for the third quarter of 2024 compared to $175.8 million for the third quarter of 2023 due to an increase in the number of producing wells from drilling and completion activities and higher workover-related activities aimed at enhancing production from producing properties. Production expenses on a per-Boe basis averaged $5.10 per Boe for the third quarter of 2024 compared to $4.21 per Boe for the third quarter of 2023.

Production and Ad Valorem Taxes. Production and ad valorem taxes decreased $30.8 million, or 19%, to $131.8 million for the third quarter of 2024 compared to $162.5 million for the third quarter of 2023 due to the previously described decrease in total commodity revenues. Our production taxes as a percentage of net sales averaged 8.1% for the third quarter of 2024, consistent with 8.1% for the third quarter of 2023.

Transportation, gathering, processing, and compression. These charges increased $2.3 million, or 3%, to $89.2 million for the third quarter of 2024 compared to $86.9 million for the third quarter of 2023 due to changes in marketing terms and arrangements utilized between periods and an increase in our working interest share of cost burdens in certain operating areas.

Depreciation, Depletion, Amortization and Accretion. Total DD&A increased $36.9 million, or 6%, to $613.9 million for the third quarter of 2024 compared to $577.0 million for the third quarter of 2023 due to an increase in our DD&A rate per Boe as further discussed below. The following table shows the components of our DD&A on a unit of sales basis for the periods presented.


	Three months ended September 30,
$/Boe	2024		2023
Crude oil and natural gas	$	15.48	$	13.28
Other equipment		0.53		0.45
Asset retirement obligation accretion		0.14		0.08
Depreciation, depletion, amortization and accretion	$	16.15	$	13.81

Estimated proved reserves are a key component in our computation of DD&A expense. Proved reserves are determined using the unweighted arithmetic average of the first-day-of-the-month commodity prices for the preceding twelve months as required by SEC rules. Holding all other factors constant, if proved reserves are revised downward due to commodity price declines or other reasons, the rate at which we record DD&A expense increases. Conversely, if proved reserves are revised upward, the rate at which we record DD&A expense decreases.

Certain of our proved reserves have been revised downward over the past year prompted by decreases in rolling twelve-month average SEC commodity prices and other factors, which contributed to an increase in our DD&A rate for crude oil and natural gas properties along with variation in the mix of sales volumes across the Company’s operating areas between periods.

General and Administrative Expenses. Total G&A expenses decreased $47.7 million, or 42%, to $64.6 million for the third quarter of 2024 compared to $112.4 million for the third quarter of 2023.

Total G&A expenses include charges for long-term incentive compensation awards of $15.9 million and $61.4 million for the third quarters of 2024 and 2023, respectively. This decrease was driven by changes in the remeasurement of outstanding award liabilities resulting from variation in the value of the Company between periods, which led to volatility in the magnitude of expense recognized in the 2023 period relative to the 2024 period.

G&A expenses other than incentive compensation awards totaled $48.7 million for the third quarter of 2024, generally consistent with $51.0 million for the third quarter of 2023.

The following table shows the components of G&A expenses on a unit of sales basis for the periods presented.


	Three months ended September 30,
$/Boe	2024		2023
General and administrative expenses	$	1.28	$	1.22
Long-term incentive compensation awards		0.42		1.47
Total general and administrative expenses	$	1.70	$	2.69

Interest Expense. Interest expense decreased $37.2 million, or 37%, to $63.7 million for the third quarter of 2024 compared to $100.9 million for the third quarter of 2023 due to a decrease in our weighted average outstanding debt balance from $7.9 billion for the third quarter of 2023 to $5.3 billion for the third quarter of 2024. This decrease was driven by debt reduction throughout the past year, including the reduction of credit facility borrowings, the repayment of our $750 million term loan, and the redemption of our $893.1 million of 2024 Notes.

Other income (expense)—Other. In the third quarter of 2024 the fair value of the option liability described in Note 6. Fair Value Measurements—Stock Redemption Option in Notes to Unaudited Condensed Consolidated Financial Statements was remeasured, which resulted in a $46 million decrease in the liability and corresponding recognition of income in the third quarter period reflecting a reduction in value as of September 30, 2024 compared to the June 30, 2024 valuation.

Income Taxes. For the third quarters of 2024 and 2023 we provided for income taxes at a combined federal and state tax rate of 23.5% of our pre-tax income. We recorded income tax provisions of $138.5 million and $106.0 million for the third quarters of 2024 and 2023, respectively, which resulted in effective tax rates of 16.1% and 22.2%, respectively, after taking into account the application of statutory tax rates, permanent taxable differences, estimated tax credits, and other items.

Nine months ended September 30, 2024 compared to the nine months ended September 30, 2023

Results of Operations

The following table presents selected financial and operating information for the periods presented.


	Nine months ended September 30,
In thousands	2024			2023
Crude oil, natural gas, and natural gas liquids sales	$	5,523,563		$	5,663,672
Gain (loss) on derivative instruments, net		161,536			270,795
Crude oil and natural gas service operations		68,532			73,716
Total revenues		5,753,631			6,008,183
Operating costs and expenses		(3,520,255	)		(3,221,798	)
Other expenses, net		(548,545	)		(297,453	)
Income before income taxes		1,684,831			2,488,932
Provision for income taxes		(401,059	)		(539,139	)
Income before equity in net loss of affiliate		1,283,772			1,949,793
Equity in net loss of affiliate		(2,981	)		(2,041	)
Net income		1,280,791			1,947,752
Net income attributable to noncontrolling interests		333			1,854
Net income attributable to Continental Resources	$	1,280,458		$	1,945,898
Production volumes:
Crude oil (MBbl)		62,803			62,098
Natural gas (MMcf)		325,465			340,529
Crude oil equivalents (MBoe)		117,048			118,852
Sales volumes:
Crude oil (MBbl)		63,242			61,780
Natural gas (MMcf)		325,465			340,529
Crude oil equivalents (MBoe)		117,486			118,535

Production

The following table summarizes the changes in our average daily Boe production by major operating area for the year to date period.


Boe production per day	YTD 9/30/2024		YTD 9/30/2023		% Change
Bakken		196,224		196,605		(0	)%
Anadarko Basin		134,737		156,550		(14	)%
Powder River Basin		24,228		23,144		5	%
Permian Basin		66,660		53,320		25	%
All other		5,332		5,738		(7	)%
Total		427,181		435,357		(2	)%

The following table summarizes the changes in our production by product for the year to date period.


	Nine months ended September 30,													Volume
	2024					2023					Volume			percent
	Volume		Percent			Volume		Percent			change			change
Crude oil (MBbl)		62,803		54	%		62,098		52	%		705			1	%
Natural gas (MMcf)		325,465		46	%		340,529		48	%		(15,064	)		(4	)%
Total (MBoe)		117,048		100	%		118,852		100	%		(1,804	)		(2	)%

The 1% increase in crude oil production and 4% decrease in natural gas production for year to date 2024 compared to year to date 2023 was driven by an increase in allocation of capital to oil-weighted projects in our operating areas and variation in the timing of new well completions between years.

Revenues

Crude oil, natural gas, and natural gas liquids sales. Sales for year to date 2024 totaled $5.52 billion, a 2% decrease compared to $5.66 billion for the comparable 2023 period driven by decreases in natural gas sales prices and natural gas sales volumes as discussed below.

Total sales volumes for year to date 2024 decreased 1,049 MBoe, or 1%, compared to year to date 2023 primarily due to the previously described decrease in natural gas production volumes. For year to date 2024, our crude oil sales volumes increased 2% while our natural gas sales volumes decreased 4% compared to year to date 2023.

Our crude oil sales prices averaged $77.02 per barrel for year to date 2024 compared to $76.93 per barrel for year to date 2023. Our natural gas sales prices averaged $2.01 per Mcf for year to date 2024 compared to $2.68 per Mcf for year to date 2023.

Derivatives. Changes in settled and future commodity prices during the nine months ended September 30, 2024 had a net favorable impact on the fair value of our derivatives, which resulted in positive revenue adjustments totaling $161.5 million for the period, representing $286.7 million of cash gains partially offset by $125.2 million of unsettled non-cash losses, compared to positive revenue adjustments totaling $270.8 million in the comparable 2023 period.

Operating Costs and Expenses

Production Expenses. Production expenses increased $33.0 million, or 6%, to $565.2 million for year to date 2024 compared to $532.2 million for year to date 2023 due to an increase in the number of producing wells from drilling and completion activities, costs associated with adverse winter weather conditions in the Bakken and Powder River Basin in the 2024 first quarter, and higher workover-related activities aimed at enhancing production from producing properties. Production expenses on a per-Boe basis averaged $4.81 per Boe for year to date 2024 compared to $4.49 per Boe for year to date 2023.

Production and Ad Valorem Taxes. Production and ad valorem taxes decreased $12.1 million, or 3%, to $428.3 million for year to date 2024 compared to $440.4 million for year to date 2023 due to the previously described decrease in total commodity revenues. Our production taxes as a percentage of net sales averaged 8.2% for year to date 2024, consistent with 8.1% for year to date 2023.

Transportation, gathering, processing, and compression. These charges increased $43.3 million, or 18%, to $288.6 million for year to date 2024 compared to $245.3 million for year to date 2023 due to changes in marketing terms and arrangements utilized between periods and an increase in our working interest share of cost burdens in certain operating areas.

Depreciation, Depletion, Amortization and Accretion. Total DD&A increased $269.7 million, or 17%, to $1.87 billion for year to date 2024 compared to $1.60 billion for year to date 2023 due to the previously described increase in our DD&A rate per Boe and variation in the mix of sales volumes across the Company’s operating areas between periods. The following table shows the components of our DD&A on a unit of sales basis for the periods presented.


	Nine months ended September 30,
$/Boe	2024		2023
Crude oil and natural gas	$	15.29	$	13.00
Other equipment		0.51		0.44
Asset retirement obligation accretion		0.14		0.09
Depreciation, depletion, amortization and accretion	$	15.94	$	13.53

Property Impairments. Total property impairments decreased $11.8 million to $34.7 million for year to date 2024 compared to $46.5 million for year to date 2023 primarily due to the recognition of $10.3 million of proved property impairments in the prior period with no proved property impairments being recognized in the current period.

General and Administrative Expenses. Total G&A expenses decreased $19.2 million, or 8%, to $211.6 million for year to date 2024 compared to $230.8 million for year to date 2023.

Total G&A expenses include charges for long-term incentive compensation awards of $69.2 million and $86.9 million for the year to date periods of 2024 and 2023, respectively. This decrease was driven by changes in the remeasurement of outstanding award

liabilities resulting from variation in the value of the Company between periods, which led to volatility in the magnitude of expense recognized in the 2023 period relative to the 2024 period coupled with a greater amount of forfeiture reversals of expense during the 2023 period.

G&A expenses other than incentive compensation awards totaled $142.4 million for year to date 2024, generally consistent with $143.9 million for year to date 2023.

The following table shows the components of G&A expenses on a unit of sales basis for the periods presented.


	Nine months ended September 30,
$/Boe	2024		2023
General and administrative expenses	$	1.21	$	1.21
Long-term incentive compensation awards		0.59		0.74
Total general and administrative expenses	$	1.80	$	1.95

Interest Expense. Interest expense decreased $90.7 million, or 30%, to $215.3 million for year to date 2024 compared to $306.0 million for year to date 2023 due to a decrease in our weighted average outstanding debt balance from $8.1 billion for year to date 2023 to $6.0 billion for year to date 2024. This decrease was driven by debt reduction throughout the past year, including the reduction of credit facility borrowings, the repayment of our $750 million term loan, and the redemption of our $893 million of 2024 Notes.

Other income (expense)—Other. See Note 6. Fair Value Measurements—Stock Redemption Option in Notes to Unaudited Condensed Consolidated Financial Statements.

Income Taxes. For the nine months ended September 30, 2024 and 2023 we provided for income taxes at a combined federal and state tax rate of 23.5% of our pre-tax income. We recorded income tax provisions of $401.1 million and $539.1 million for the year to date periods of 2024 and 2023, respectively, which resulted in effective tax rates of 23.8% and 21.7%, respectively, after taking into account the application of statutory tax rates, permanent taxable differences, estimated tax credits, and other items.

Liquidity and Capital Resources

Our primary sources of liquidity have historically been cash flows generated from operating activities, financing provided by our credit facility, and the issuance of debt securities. Additionally, asset dispositions and joint development arrangements have provided a source of cash flow for use in reducing debt and enhancing liquidity.

On October 29, 2024, we entered into a new credit facility (“New Facility”) to replace our prior credit facility. The New Facility extended the maturity date from October 2026 to October 2029 and reduced the aggregate lender commitments from $2.255 billion to $1.80 billion. At October 31, 2024, we had $100 million of outstanding borrowings and $1.7 billion of borrowing availability under our New Facility. Our New Facility remains unsecured and has no borrowing base requirement subject to redetermination.

Based on our planned capital spending, our forecasted cash flows and projected levels of indebtedness, we expect to maintain compliance with the covenants under our New Facility and senior note indentures. Further, based on current market indications, we expect to meet our contractual cash commitments to third parties as of September 30, 2024, including those subsequently described under the heading Future Capital Requirements, recognizing we may be required to meet such commitments even if our business plan assumptions were to change. We monitor our capital spending closely based on actual and projected cash flows and have the ability to reduce spending or dispose of assets if needed to preserve liquidity and financial flexibility to fund our operations.

Cash Flows

Cash flows from operating activities

Net cash provided by operating activities decreased $35 million, or 1%, to $3.53 billion for year to date 2024 compared to $3.57 billion for year to date 2023. The decrease was primarily driven by our $140 million decrease in crude oil, natural gas and NGL revenues along with increases in certain cash operating expenses including a $33 million increase in production expenses, a $43

million increase in transportation, gathering, processing, and compression expenses, and a $158 million increase in cash payments for income taxes. These decreases in cash flows were partially offset by a $77 million increase in realized cash gains on matured commodity derivatives, a $75 million decrease in cash payments for interest on our outstanding debt, and a $12 million decrease in production and ad valorem taxes.

Cash flows from investing activities

Net cash used in investing activities totaled $1.86 billion for year to date 2024 compared to $2.77 billion for year to date 2023. Our investing cash flows for year to date 2024 included $2.14 billion of exploration and development costs compared to $2.80 billion for year to date 2023, reflecting variation in the timing of our capital spending between periods. For full year 2024 our capital expenditures budget attributable to us is $3.4 billion compared to $3.3 billion of non-acquisition capital spending in full year 2023. In addition, net cash used in investing activities was further decreased by lower acquisitions of producing crude oil and natural gas properties, with $1.2 million acquired for year to date 2024 compared to $162.0 million acquired for year to date 2023. Proceeds received from the sale of assets also increased by $89.6 million for year to date 2024 compared to the prior year to date period.

Cash flows from financing activities

Net cash used in financing activities for year to date 2024 totaled $1.67 billion driven by $1.67 billion of net repayments of outstanding debt.

Net cash used in financing activities for year to date 2023 totaled $886.8 million, primarily consisting of $866.8 million of net repayments on outstanding debt and $25.3 million of cash distributed to noncontrolling interests.

Future Sources of Financing

Although we cannot provide any assurance, we believe funds from operating cash flows, our cash balance, and availability under our credit facility should be sufficient to meet our normal operating needs, debt service obligations, budgeted capital expenditures, and cash payments for income taxes for at least the next 12 months and to meet our contractual cash commitments to third parties described under the heading Future Capital Requirements beyond 12 months.

Based on current market indications supported by cash flow protection provided by our hedge portfolio against commodity price declines, our budgeted capital spending plans over the next 12 months are expected to be funded from operating cash flows. Any deficiencies in operating cash flows relative to budgeted spending are expected to be funded by borrowings under our credit facility. If cash flows are materially impacted by declines in commodity prices, we have the ability to reduce our capital expenditures or utilize the availability of our credit facility if needed to fund our operations.

We may choose to access banking or debt capital markets for additional financing or capital to fund our operations or take advantage of business opportunities that may arise. Further, we may sell assets or enter into strategic joint development opportunities in order to obtain funding if such transactions can be executed on satisfactory terms. However, no assurance can be given that such transactions will occur.

Credit facility

On October 29, 2024, we entered into a New Facility, maturing in October 2029, with aggregate lender commitments totaling $1.80 billion. The commitments are from a syndicate of 14 banks and financial institutions. We believe each member of the current syndicate has the capability to fund its commitment.

The commitments under our New Facility are not dependent on a borrowing base calculation subject to periodic redetermination based on changes in commodity prices and proved reserves. Additionally, downgrades or other negative rating actions with respect to our credit rating do not trigger a reduction in our current credit facility commitments, nor do such actions trigger a security requirement or change in covenants.

Our New Facility contains restrictive covenants that may limit our ability to, among other things, incur additional indebtedness, incur liens, engage in sale and leaseback transactions, or merge, consolidate or sell all or substantially all of our assets. Our New Facility

also contains a requirement that we maintain a consolidated net debt to total capitalization ratio of no greater than 0.65 to 1.00, which is unchanged from the prior credit facility. See Notes to Unaudited Condensed Consolidated Financial Statements–Note 7. Debt for a discussion of how this ratio is calculated pursuant to our credit agreement, as entered into on October 29, 2024.

We were in compliance with our credit facility covenants at September 30, 2024 and expect to maintain compliance. At September 30, 2024, our consolidated net debt to total capitalization ratio calculated pursuant to our New Facility was 0.28. We do not believe the New Facility covenants are reasonably likely to limit our ability to undertake additional debt financing if needed to support our business.

Future Capital Requirements

Our material future cash requirements are summarized below. Based on current market indications, we expect to meet our contractual cash commitments to third parties as of September 30, 2024, recognizing we may be required to meet such commitments even if our business plan assumptions were to change.

Senior notes

Our debt includes outstanding senior note obligations totaling $4.8 billion at September 30, 2024, exclusive of interest payment obligations thereon. Our senior notes are not subject to any mandatory redemption or sinking fund requirements. For further information on the face values, maturity dates, semi-annual interest payment dates, optional redemption periods and covenant restrictions related to our senior notes, refer to Note 7. Debt in Notes to Unaudited Condensed Consolidated Financial Statements.

We were in compliance with our senior note covenants at September 30, 2024 and expect to maintain compliance. We do not believe the senior note covenants will materially limit our ability to undertake additional debt financing. Downgrades or other negative rating actions with respect to the credit ratings assigned to our senior unsecured debt do not trigger additional senior note covenants.

Credit facility borrowings

As of October 31, 2024, we had $100 million of outstanding borrowings on our New Facility. Our New Facility matures in October 2029.

Transportation, gathering, and processing commitments

We have entered into transportation, gathering, and processing commitments to guarantee capacity on crude oil and natural gas pipelines and natural gas processing facilities that require us to pay per-unit charges regardless of the amount of capacity used. Future commitments remaining as of September 30, 2024 under the arrangements amount to approximately $868 million. See Note 8. Commitments and Contingencies in Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

Capital expenditures

Our capital expenditures budget for 2024 is expected to be $3.4 billion. Costs of acquisitions and investments are not budgeted, with the exception of planned levels of spending for mineral acquisitions.

For the nine months ended September 30, 2024, we invested $2.3 billion in our capital program, excluding $17 million of unbudgeted acquisitions and $21 million of mineral acquisitions attributable to Franco-Nevada.

Our drilling and completion activities and the actual amount and timing of our capital expenditures may differ materially from our budget as a result of, among other things, available cash flows, unbudgeted acquisitions, actual drilling and completion results, operational process improvements, the availability of drilling and completion rigs and other services and equipment, cost inflation, the availability of transportation, gathering and processing capacity, changes in commodity prices, and regulatory, technological and competitive developments. We monitor our capital spending closely based on actual and projected cash flows and may adjust our spending should commodity prices materially change from current levels. We expect to continue participating as a buyer of properties when and if we have the ability to increase our position in strategic plays at attractive terms.

Cash payments for income taxes

For the nine months ended September 30, 2024, we made cash payments for federal and state income taxes totaling $614 million, representing payments associated with 2023 tax return filing extensions and estimated quarterly payments for 2024 federal and state income taxes based on estimates of taxable income for 2024. Significant judgment is involved in estimating future taxable income, as we are required to make assumptions about future commodity prices, projected production, development activities, capital spending, profitability, and general economic conditions, all of which are subject to material revision in future periods as better information becomes available. If commodity prices remain at current levels, we expect to continue generating significant taxable income through at least year-end 2025, which would result in us continuing to make estimated tax payments on a quarterly basis in 2025. Because of the significant uncertainty inherent in numerous factors utilized in projecting taxable income, we cannot predict the amount of future income tax payments with certainty.

Long-term incentive compensation awards

At December 31, 2023 we had recognized a current liability of $131 million on the condensed consolidated balance sheet associated with unvested incentive compensation awards granted to employees, which was subsequently paid in cash to employees in February 2024 upon the scheduled vesting of the awards. We granted additional incentive compensation awards in 2024 and intend to continue granting additional awards on an annual basis that we plan to settle in cash upon vesting.

At September 30, 2024 we have recognized a current liability of $66.5 million and a non-current liability of $30.7 million associated with unvested awards granted to employees that are scheduled to vest in 2025, 2026, and 2027. Our recognized liabilities will be remeasured each reporting period leading up to the applicable award vesting dates to reflect additional services rendered by employees and to reflect changes in expected cash payments arising from underlying changes in the value of the Company based on independent third party appraisals.

Stock redemption option

See Note 6. Fair Value Measurements—Stock Redemption Option in Notes to Unaudited Condensed Consolidated Financial Statements.

Derivative Instruments

The fair value of our derivative instruments at September 30, 2024 was a net asset of $382.8 million. See Note 5. Derivative Instruments in Notes to Unaudited Condensed Consolidated Financial Statements for further discussion of our hedging activities, including a summary of derivative contracts in place as of September 30, 2024. The estimated fair value of our derivatives is highly sensitive to market price volatility and therefore subject to significant fluctuations from period to period. See Item 3. Quantitative and Qualitative Disclosures About Market Risk for information on how hypothetical changes in commodity prices would impact the fair value of our derivatives as of September 30, 2024.

Critical Accounting Policies and Estimates

There have been no changes in our critical accounting policies and estimates from those disclosed in our 2023 Form 10-K.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

General. We are exposed to a variety of market risks including commodity price risk, credit risk, and interest rate risk. We seek to address these risks through a program of risk management which may include the use of derivative instruments.

Commodity Price Risk. Our primary market risk exposure is in the prices we receive from sales of crude oil, natural gas, and natural gas liquids. Realized pricing is primarily driven by the prevailing worldwide price for crude oil and spot market prices applicable to our natural gas and natural gas liquids production. Commodity prices have been volatile and unpredictable for several years, and we expect this volatility to continue in the future. The prices we receive for production depend on many factors outside of our control, including differences between product prices at sales points and the applicable index prices. Based on our average daily production for the nine months ended September 30, 2024, and excluding the effect of derivative instruments in place, our annual revenue would increase or decrease by approximately $837 million for each $10.00 per barrel change in crude oil prices at September 30, 2024 and $434 million for each $1.00 per Mcf change in natural gas prices at September 30, 2024.

To reduce price risk caused by market fluctuations in commodity prices, from time to time we economically hedge a portion of our anticipated production as part of our risk management program. In addition, we may utilize basis contracts to hedge the differential between derivative contract index prices and those of our physical pricing points. Reducing our exposure to price volatility helps secure funds to be used for our capital program and general corporate purposes. Our decision on the quantity and price at which we choose to hedge our production is based in part on our view of current and future market conditions. We may choose not to hedge future production if the price environment for certain time periods is deemed to be unfavorable. Additionally, we may choose to settle existing derivative positions prior to the expiration of their contractual maturities. While hedging, if utilized, limits the downside risk of adverse price movements, it also limits future revenues from upward price movements.

The fair value of our derivative instruments at September 30, 2024 was a net asset of $382.8 million, which is comprised of a $290.2 million net asset associated with our natural gas derivatives and a $92.6 million net asset associated with our crude oil derivatives. The following table shows how a hypothetical +/- 10% change in the underlying forward prices used to calculate the fair value of our derivatives would impact the fair value estimates as of September 30, 2024.


		Hypothetical Fair Value
In thousands	Change in Forward Price	Asset (Liability)
Crude Oil	-10%	$	153,365
Crude Oil	+10%	$	31,735
Natural Gas	-10%	$	530,052
Natural Gas	+10%	$	50,381

Changes in the fair value of our derivatives from the above price sensitivities would produce a corresponding change in our total revenues.

Credit Risk. We monitor our risk of loss due to non-performance by counterparties of their contractual obligations. Our principal exposure to credit risk is through the sale of our production, which we market to energy marketing companies, crude oil refining companies, and natural gas gathering and processing companies ($970 million in receivables at September 30, 2024), and our joint interest and other receivables ($325 million at September 30, 2024).

We monitor our exposure to counterparties on our commodity sales primarily by reviewing credit ratings, financial statements and payment history. We extend credit terms based on our evaluation of each counterparty’s credit worthiness. We have not generally required our counterparties to provide collateral to secure commodity sales receivables owed to us. Historically, our credit losses on commodity sales receivables have been immaterial.

Joint interest receivables arise from billing the individuals and entities who own a partial interest in the wells we operate. These individuals and entities participate in our wells primarily based on their ownership in leases included in units on which we wish to drill. We can do very little to choose who participates in our wells. In order to minimize our exposure to this credit risk we generally request prepayment of drilling costs where it is allowed by contract or state law. For such prepayments, a liability is recorded and subsequently reduced as the associated work is performed. This liability was $48 million at September 30, 2024, which will be used to

offset future capital costs when billed. In this manner, we reduce credit risk. We may have the right to place a lien on a co-owner's interest in the well, to net production proceeds against amounts owed in order to secure payment or, if necessary, foreclose on the interest. Historically, our credit losses on joint interest receivables have been immaterial.

Interest Rate Risk. Our exposure to changes in interest rates relates primarily to variable-rate borrowings we have outstanding from time to time under our credit facility. Such borrowings bear interest at market-based interest rates plus a margin based on the terms of the borrowing and the credit ratings assigned to our senior, unsecured, long-term indebtedness. All of our other long-term indebtedness is fixed rate and does not expose us to the risk of cash flow loss due to changes in market interest rates.

We had $100 million of variable rate borrowings outstanding on our credit facility at October 31, 2024. The impact of a 0.25% increase in interest rates on this amount of debt would result in increased interest expense and reduced income before income taxes of approximately $0.3 million per year.

We manage our interest rate exposure by monitoring both the effects of market changes in interest rates and the proportion of our debt portfolio that is variable-rate versus fixed-rate debt. We may utilize interest rate derivatives to alter interest rate exposure in an attempt to reduce interest rate expense related to existing debt issues. Interest rate derivatives may be used solely to modify interest rate exposure and not to modify the overall leverage of the debt portfolio. We currently have no interest rate derivatives.

ITEM 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) was performed under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded the Company’s disclosure controls and procedures were effective as of September 30, 2024 to ensure information required to be disclosed in the reports it files and submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and information required to be disclosed under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the three months ended September 30, 2024, there were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Controls and Procedures

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, even an effective system of internal control will provide only reasonable assurance that the objectives of the internal control system are met.

PART II. Other Information

ITEM 1. Legal Proceedings

We are involved in various legal proceedings including, but not limited to, commercial disputes, claims from royalty and surface owners, property damage claims, claims made by former shareholders in connection with our take-private transaction, antitrust claims related to the market price of hydrocarbons, personal injury claims, regulatory compliance matters, disputes with tax authorities and other matters. While the outcome of these legal matters cannot be predicted with certainty, we do not expect them to have a material adverse effect on our financial condition, results of operations or cash flows.

ITEM 1A. Risk Factors

In addition to the information set forth in this Form 10-Q, you should carefully consider the risk factors discussed in Part I, Item 1A. Risk Factors in our 2023 Form 10-K, which could materially affect our business, financial condition or future results. The risks described in this Form 10-Q, if any, and in our 2023 Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

There have been no material changes in our risk factors from those disclosed in our 2023 Form 10-K.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

ITEM 3. Defaults Upon Senior Securities

Not applicable.

ITEM 4. Mine Safety Disclosures

Not applicable.

ITEM 5. Other Information

Not applicable.

ITEM 6. Exhibits

The exhibits required to be filed pursuant to Item 601 of Regulation S-K are set forth below.


3.1*		Sixth Amended and Restated Certificate of Incorporation of Continental Resources, Inc.

3.2*		Sixth Amended and Restated Bylaws of Continental Resources, Inc.

10.1*		Revolving Credit Agreement dated as of October 29, 2024 by and among (i) Continental Resources, Inc. as borrower, (ii) Banner Pipeline Company, L.L.C., CLR Asset Holdings, LLC, The Mineral Resources Company, Continental Innovations LLC, SCS1 Holdings LLC, Jagged Peak Energy LLC and Parsley SoDe Water LLC, as guarantors, (iii) MUFG Bank, LTD., as administrative agent, and (iv) the banks and other financial institutions party thereto as lenders.

31.1*		Certification of the Company’s Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. Section 7241).

31.2*		Certification of the Company’s Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. Section 7241).

101.INS*		Inline XBRL Instance Document - the Inline XBRL Instance Document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document

101.SCH*		Inline XBRL Taxonomy Extension Schema Document with Embedded Linkbases Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		CONTINENTAL RESOURCES, INC.

Date:	November 12, 2024	By:	/s/ John D. Hart
			John D. Hart
			Chief Financial Officer and Executive Vice President of Strategic Planning (Duly Authorized Officer and Principal Financial Officer)

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	8th grade Avg

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

20 N. Broadway,

Oklahoma City,

(Address of principal executive offices)

(Zip Code)