clr-20200930

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, 2020


☐			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)

____________________________________

Oklahoma

73-0767549

(State or other jurisdiction of incorporation or organization)

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

20 N. Broadway,

Oklahoma City,

Oklahoma

73102

(Address of principal executive offices)

(Zip Code)

(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:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	CLR	New York Stock Exchange

____________________________________

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 x No ¨

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

☐

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

365,234,283 shares of our $0.01 par value common stock were outstanding on October 31, 2020.

Table of Contents



PART I. Financial Information
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets	1
	Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)	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	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	39

PART II. Other Information
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	41
Item 5.	Other Information	41
Item 6.	Exhibits	42
	Signature	43

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.

“completion” The process of treating a drilled well followed by the installation of permanent equipment for the production of crude oil and/or natural gas.

“developed acreage” The number of acres allocated or assignable to productive wells or wells capable of production.

“development well” A well drilled within the proved area of a crude oil or natural gas reservoir to the depth of a stratigraphic horizon known to be productive.

“dry hole” Exploratory or development well that does not produce crude oil and/or natural gas in economically producible quantities.

“exploratory well” A well drilled to find crude oil or natural gas in an unproved area, to find a new reservoir in an existing field previously found to be productive of crude oil or natural gas in another reservoir, or to extend a known reservoir beyond the proved area.

“field” An area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.

“formation” A layer of rock which has distinct characteristics that differs from nearby rock.

"gross acres" or "gross wells" Refers to the total acres or wells in which a working interest is owned.

“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.

“net acres” or "net wells" Refers to the sum of the fractional working interests owned in gross acres or gross wells.

"Net crude oil and natural gas sales" Represents total crude oil and natural gas sales less total transportation expenses. Net crude oil and natural gas sales presented herein are non-GAAP measures. See Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures for a discussion and calculation of this measure.

"Net sales price" Represents the average net wellhead sales price received by the Company for its crude oil or natural gas sales after deducting transportation expenses. Amount is calculated by taking revenues less transportation expenses divided by sales volumes for a period, whether for crude oil or natural gas, as applicable. Net sales prices presented herein are non-GAAP measures. See Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures for a discussion and calculation of this measure.

“NYMEX” The New York Mercantile Exchange.

“play” A portion of the exploration and production cycle following the identification by geologists and geophysicists of areas with potential crude oil and natural gas reserves.

“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.

“reservoir” A porous and permeable underground formation containing a natural accumulation of producible crude oil and/or natural gas that is confined by impermeable rock or water barriers and is separate from other reservoirs.

“royalty interest” Refers to the ownership of a percentage of the resources or revenues produced from a crude oil or natural gas property. A royalty interest owner does not bear exploration, development, or operating expenses associated with drilling and producing a crude oil or natural gas property.

“SCOOP” Refers to the South Central Oklahoma Oil Province, a term used to describe properties located in the Anadarko basin of Oklahoma in which we operate. Our SCOOP acreage extends across portions of Garvin, Grady, Stephens, Carter, McClain and Love counties of Oklahoma and has the potential to contain hydrocarbons from a variety of conventional and unconventional reservoirs overlying and underlying the Woodford formation.

"STACK" Refers to Sooner Trend Anadarko Canadian Kingfisher, a term used to describe a resource play located in the Anadarko Basin of Oklahoma characterized by stacked geologic formations with major targets in the Meramec, Osage and Woodford formations. A significant portion of our STACK acreage is located in over-pressured portions of Blaine, Dewey and Custer counties of Oklahoma.

“undeveloped acreage” Lease acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of crude oil and/or natural gas.

“unit” The joining of all or substantially all interests in a reservoir or field, rather than a single tract, to provide for development and operation without regard to separate property interests. Also, the area covered by a unitization agreement.

“working interest” The right granted to the lessee of a property to explore for and to produce and own crude oil, natural gas, or other minerals. The working interest owners bear the exploration, development, and operating costs on either a cash, penalty, or carried basis.

Cautionary Statement for Purpose of “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 crude oil and natural gas 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 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 and natural gas;

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

•property exploitation, property acquisitions and dispositions, or joint development opportunities;

•costs of exploiting and developing our properties and conducting other operations;

•our financial position, dividend payments, bond repurchases, or share repurchases;

•the impact of the COVID-19 (novel coronavirus) pandemic on economic conditions, the demand for crude oil, the Company's operations and the operations of its customers, suppliers, and service providers;

•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, 2019, our Form 10-Qs for the quarters ended March 31, 2020 and June 30, 2020, registration statements we file from time to time with the Securities and Exchange Commission, and other announcements we make from time to time.

Many of the foregoing risks and uncertainties have been, and may further be, exacerbated by the COVID-19 pandemic and any consequent worsening of the global economic environment. New factors emerge from time to time, and it is not possible for us to predict all such factors. 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. Should one or more of the risks or uncertainties described in this report, our Annual Report on Form 10-K, or our Form 10-Qs for the quarters ended March 31, 2020 and June 30, 2020 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.

iii

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.

PART I. Financial Information

ITEM 1. Financial Statements

Continental Resources, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets


	September 30, 2020		December 31, 2019
In thousands, except par values and share data	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	21,237	$	39,400
Receivables:
Crude oil and natural gas sales	475,187		726,876

Joint interest and other	126,135		317,018
Allowance for credit losses	(2,220)		(2,407)
Receivables, net	599,102		1,041,487
Derivative assets	346		—
Inventories	63,170		109,536
Prepaid expenses and other	15,907		16,592
Total current assets	699,762		1,207,015
Net property and equipment, based on successful efforts method of accounting	14,004,414		14,497,726
Operating lease right-of-use assets	10,396		9,128
Other noncurrent assets	13,652		14,038
Total assets	$	14,728,224	$	15,727,907

Liabilities and equity
Current liabilities:
Accounts payable trade	$	321,975	$	629,264
Revenues and royalties payable	260,887		470,264

Accrued liabilities and other	151,662		230,368

Derivative liabilities	7,086		—
Current portion of operating lease liabilities	4,225		3,695
Current portion of long-term debt	2,225		2,435
Total current liabilities	748,060		1,336,026
Long-term debt, net of current portion	5,629,133		5,324,079
Other noncurrent liabilities:
Deferred income tax liabilities, net	1,650,998		1,787,125
Asset retirement obligations, net of current portion	173,762		151,774
Derivative liabilities, noncurrent	1,820		—
Operating lease liabilities, net of current portion	6,005		5,433
Other noncurrent liabilities	14,332		15,119
Total other noncurrent liabilities	1,846,917		1,959,451
Commitments and contingencies (Note 10)
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; 365,112,162 shares issued and outstanding at September 30, 2020; 371,074,036 shares issued and outstanding at December 31, 2019	3,651		3,711
Additional paid-in capital	1,188,891		1,274,732
Retained earnings	4,940,142		5,463,224
Total shareholders’ equity attributable to Continental Resources	6,132,684		6,741,667
Noncontrolling interests	371,430		366,684
Total equity	6,504,114		7,108,351
Total liabilities and equity	$	14,728,224	$	15,727,907

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

Continental Resources, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)


	Three months ended September 30,				Nine months ended September 30,
In thousands, except per share data	2020		2019		2020		2019
Revenues:
Crude oil and natural gas sales	$	701,468	$	1,081,400	$	1,738,863	$	3,328,409
Gain (loss) on derivative instruments, net	(17,853)		1,195		(25,635)		53,519
Crude oil and natural gas service operations	8,755		21,602		35,602		54,886
Total revenues	692,370		1,104,197		1,748,830		3,436,814

Operating costs and expenses:
Production expenses	88,701		114,050		271,852		333,446
Production taxes	50,153		86,931		132,444		267,237
Transportation expenses	55,272		62,038		148,079		164,569
Exploration expenses	1,041		2,472		14,638		7,399
Crude oil and natural gas service operations	3,316		8,224		15,288		26,616
Depreciation, depletion, amortization and accretion	461,191		484,031		1,288,185		1,464,672
Property impairments	18,518		20,199		264,976		66,854
General and administrative expenses	45,273		46,993		129,713		141,837
Net (gain) loss on sale of assets and other	800		535		5,914		647
Total operating costs and expenses	724,265		825,473		2,271,089		2,473,277
Income (loss) from operations	(31,895)		278,724		(522,259)		963,537
Other income (expense):
Interest expense	(63,884)		(68,090)		(192,547)		(204,398)
Gain (loss) on extinguishment of debt	—		(4,584)		64,573		(4,584)
Other	224		1,119		1,385		3,196
	(63,660)		(71,555)		(126,589)		(205,786)
Income (loss) before income taxes	(95,555)		207,169		(648,848)		757,751
(Provision) benefit for income taxes	13,972		(49,747)		138,350		(177,386)
Net income (loss)	(81,583)		157,422		(510,498)		580,365
Net loss attributable to noncontrolling interests	(2,161)		(740)		(6,126)		(1,330)
Net income (loss) attributable to Continental Resources	$	(79,422)	$	158,162	$	(504,372)	$	581,695

Net income (loss) per share attributable to Continental Resources:
Basic	$	(0.22)	$	0.43	$	(1.39)	$	1.56
Diluted	$	(0.22)	$	0.43	$	(1.39)	$	1.56

Comprehensive income (loss):
Net income (loss)	$	(81,583)	$	157,422	$	(510,498)	$	580,365
Other comprehensive income, net of tax:
Foreign currency translation adjustments	—		(18)		—		128
Total other comprehensive income, net of tax	—		(18)		—		128
Comprehensive income (loss)	(81,583)		157,404		(510,498)		580,493
Comprehensive loss attributable to noncontrolling interests	(2,161)		(740)		(6,126)		(1,330)
Comprehensive income (loss) attributable to Continental Resources	$	(79,422)	$	158,144	$	(504,372)	$	581,823

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

Continental Resources, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Equity


	Shareholders’ equity attributable to Continental Resources
In thousands, except share data	Shares outstanding	Common stock		Additional paid-in capital		Accumulated other comprehensive income		Treasury stock		Retained earnings		Total shareholders’ equity of Continental Resources		Noncontrolling interests		Total equity
Balance at December 31, 2019	371,074,036	$	3,711	$	1,274,732	$	—	$	—	$	5,463,224	$	6,741,667	$	366,684	$	7,108,351
Net income (loss)	—	—		—		—		—		(185,664)		(185,664)		(1,120)		(186,784)
Cumulative effect adjustment from adoption of ASU 2016-13	—	—		—		—		—		(137)		(137)		—		(137)
Cash dividends declared ($0.05 per share)	—	—		—		—		—		(18,580)		(18,580)		—		(18,580)
Change in dividends payable	—	—		—		—		—		2		2		—		2
Common stock repurchased	—	—		—		—		(126,906)		—		(126,906)		—		(126,906)
Common stock retired	(8,122,104)	(81)		(126,825)		—		126,906		—		—		—		—
Stock-based compensation	—	—		16,411		—		—		—		16,411		—		16,411
Restricted stock:
Granted	2,454,235	24		—		—		—		—		24		—		24
Repurchased and canceled	(246,346)	(2)		(6,452)		—		—		—		(6,454)		—		(6,454)
Forfeited	(42,818)	(1)		—		—		—		—		(1)		—		(1)
Contributions from noncontrolling interests	—	—		—		—		—		—		—		16,950		16,950
Distributions to noncontrolling interests	—	—		—		—		—		—		—		(5,618)		(5,618)
Balance at March 31, 2020	365,117,003	$	3,651	$	1,157,866	$	—	$	—	$	5,258,845	$	6,420,362	$	376,896	$	6,797,258
Net income (loss)	—	—		—		—		—		(239,286)		(239,286)		(2,845)		(242,131)
Change in dividends payable	—	—		—		—		—		2		2		—		2



Stock-based compensation	—	—		15,313		—		—		—		15,313		—		15,313
Restricted stock:
Granted	85,514	1		—		—		—		—		1		—		1
Repurchased and canceled	(19,037)	—		(247)		—		—		—		(247)		—		(247)
Forfeited	(39,237)	(1)		—		—		—		—		(1)		—		(1)
Contributions from noncontrolling interests	—	—		—		—		—		—		—		4,015		4,015
Distributions to noncontrolling interests	—	—		—		—		—		—		—		(2,958)		(2,958)
Balance at June 30, 2020	365,144,243	$	3,651	$	1,172,932	$	—	$	—	$	5,019,561	$	6,196,144	$	375,108	$	6,571,252
Net income (loss)	—	—		—		—		—		(79,422)		(79,422)		(2,161)		(81,583)
Change in dividends payable	—	—		—		—		—		3		3		—		3



Stock-based compensation	—	—		16,330		—		—		—		16,330		—		16,330
Restricted stock:
Granted	43,241	1		—		—		—		—		1		—		1
Repurchased and canceled	(20,873)	—		(371)		—		—		—		(371)		—		(371)
Forfeited	(54,449)	(1)		—		—		—		—		(1)		—		(1)
Contributions from noncontrolling interests	—	—		—		—		—		—		—		36		36
Distributions to noncontrolling interests	—	—		—		—		—		—		—		(1,553)		(1,553)
Balance at September 30, 2020	365,112,162	$	3,651	$	1,188,891	$	—	$	—	$	4,940,142	$	6,132,684	$	371,430	$	6,504,114

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)


	Shareholders’ equity attributable to Continental Resources
In thousands, except share data	Shares outstanding	Common stock		Additional paid-in capital		Accumulated other comprehensive income		Treasury stock		Retained earnings		Total shareholders’ equity of Continental Resources		Noncontrolling interests		Total equity
Balance at December 31, 2018	376,021,575	$	3,760	$	1,434,823	$	415	$	—	$	4,706,135	$	6,145,133	$	276,728	$	6,421,861
Net income (loss)	—	—		—		—		—		186,976		186,976		(483)		186,493
Other comprehensive income, net of tax	—	—		—		116		—		—		116		—		116
Stock-based compensation	—	—		12,095		—		—		—		12,095		—		12,095
Restricted stock:
Granted	1,333,602	13		—		—		—		—		13		—		13
Repurchased and canceled	(439,419)	(4)		(20,618)		—		—		—		(20,622)		—		(20,622)
Forfeited	(147,074)	(1)		—		—		—		—		(1)		—		(1)
Contributions from noncontrolling interests	—	—		—		—		—		—		—		42,204		42,204
Distributions to noncontrolling interests	—	—		—		—		—		—		—		(3,856)		(3,856)
Balance at March 31, 2019	376,768,684	$	3,768	$	1,426,300	$	531	$	—	$	4,893,111	$	6,323,710	$	314,593	$	6,638,303
Net income (loss)	—	—		—		—		—		236,557		236,557		(107)		236,450
Cash dividends declared ($0.05 per share)	—	—		—		—		—		(18,747)		(18,747)		—		(18,747)
Common stock repurchased	—	—		—		—		(69,661)		—		(69,661)		—		(69,661)
Common stock retired	(1,800,000)	(18)		(69,643)		—		69,661		—		—		—		—
Other comprehensive income, net of tax	—	—		—		30		—		—		30		—		30
Stock-based compensation	—	—		12,176		—		—		—		12,176		—		12,176
Restricted stock:
Granted	59,639	1		—		—		—		—		1		—		1
Repurchased and canceled	(13,335)	(1)		(561)		—		—		—		(562)		—		(562)
Forfeited	(71,440)	(1)		—		—		—		—		(1)		—		(1)
Contributions from noncontrolling interests	—	—		—		—		—		—		—		35,118		35,118
Distributions to noncontrolling interests	—	—		—		—		—		—		—		(3,272)		(3,272)
Balance at June 30, 2019	374,943,548	$	3,749	$	1,368,272	$	561	$	—	$	5,110,921	$	6,483,503	$	346,332	$	6,829,835
Net income (loss)	—	—		—		—		—		158,162		158,162		(740)		157,422
Change in dividends payable	—	—		—		—		—		160		160		—		160
Common stock repurchased	—	—		—		—		(102,304)		—		(102,304)		—		(102,304)
Common stock retired	(3,206,553)	(32)		(102,272)		—		102,304		—		—		—		—
Other comprehensive loss, net of tax	—	—		—		(18)		—		—		(18)		—		(18)
Stock-based compensation	—	—		12,871		—		—		—		12,871		—		12,871
Restricted stock:
Granted	102,945	1		—		—		—		—		1		—		1
Repurchased and canceled	(13,353)	—		(389)		—		—		—		(389)		—		(389)
Forfeited	(96,099)	(1)		—		—		—		—		(1)		—		(1)
Contributions from noncontrolling interests	—	—		—		—		—		—		—		19,713		19,713
Distributions to noncontrolling interests	—	—		—		—		—		—		—		(3,110)		(3,110)
Balance at September 30, 2019	371,730,488	$	3,717	$	1,278,482	$	543	$	—	$	5,269,243	$	6,551,985	$	362,195	$	6,914,180

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	2020		2019
Cash flows from operating activities
Net income (loss)	$	(510,498)	$	580,365
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion	1,286,889		1,465,856
Property impairments	264,976		66,854
Non-cash (gain) loss on derivatives	8,560		(1,303)
Stock-based compensation	48,086		37,153
Provision (benefit) for deferred income taxes	(136,127)		177,386
Dry hole costs	6,456		—
Net (gain) loss on sale of assets and other	5,914		647
(Gain) loss on extinguishment of debt	(64,573)		4,584
Other, net	7,811		8,036
Changes in assets and liabilities:
Accounts receivable	435,862		(42,269)
Inventories	21,846		(21,867)
Other current assets	1,196		(3,808)
Accounts payable trade	(150,645)		56,624
Revenues and royalties payable	(209,258)		(309)
Accrued liabilities and other	(80,227)		(15,707)
Other noncurrent assets and liabilities	(1,501)		(366)
Net cash provided by operating activities	934,767		2,311,876

Cash flows from investing activities
Exploration and development	(1,139,447)		(2,268,594)
Purchase of producing crude oil and natural gas properties	(23,318)		(49,324)
Purchase of other property and equipment	(21,306)		(22,875)
Proceeds from sale of assets	2,205		86,866
Net cash used in investing activities	(1,181,866)		(2,253,927)

Cash flows from financing activities
Credit facility borrowings	1,657,000		776,000
Repayment of credit facility	(1,237,000)		(476,000)

Redemption of Senior Notes	(74,032)		(500,000)
Premium and costs on redemption of Senior Notes	—		(4,167)

Proceeds from other debt	26,000