x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Oklahoma
|
|
73-0767549
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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|
|
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20 N. Broadway, Oklahoma City, Oklahoma
|
|
73102
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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x
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Accelerated filer
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¨
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|||
Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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||
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Item 1.
|
||
Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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||
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•
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our business strategy;
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•
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our future operations;
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•
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our crude oil and natural gas reserves;
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•
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our technology;
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•
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our financial strategy;
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•
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crude oil, natural gas liquids, and natural gas prices and differentials;
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•
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the timing and amount of future production of crude oil and natural gas and flaring activities;
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•
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the amount, nature and timing of capital expenditures;
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•
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estimated revenues, expenses and results of operations;
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•
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drilling and completing of wells;
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•
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competition;
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•
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marketing of crude oil and natural gas;
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•
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transportation of crude oil, natural gas liquids, and natural gas to markets;
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•
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exploitation or property acquisitions and dispositions;
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•
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costs of exploiting and developing our properties and conducting other operations;
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•
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our financial position;
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•
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general economic conditions;
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•
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credit markets;
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•
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our liquidity and access to capital;
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•
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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;
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•
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our future operating results;
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•
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plans, objectives, expectations and intentions contained in this report that are not historical, including, without limitation, statements regarding our future growth plans;
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•
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our commodity or other hedging arrangements; and
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•
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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.
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ITEM 1.
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Financial Statements
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|
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March 31, 2014
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|
December 31, 2013
|
||||
In thousands, except par values and share data
|
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
51,535
|
|
|
$
|
28,482
|
|
Receivables:
|
|
|
|
|
||||
Crude oil and natural gas sales
|
|
709,775
|
|
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643,498
|
|
||
Affiliated parties
|
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17,134
|
|
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13,107
|
|
||
Joint interest and other, net
|
|
330,728
|
|
|
349,579
|
|
||
Derivative assets
|
|
799
|
|
|
3,616
|
|
||
Inventories
|
|
72,109
|
|
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54,440
|
|
||
Deferred and prepaid taxes
|
|
47,114
|
|
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44,337
|
|
||
Prepaid expenses and other
|
|
12,381
|
|
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10,207
|
|
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Total current assets
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1,241,575
|
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1,147,266
|
|
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Net property and equipment, based on successful efforts method of accounting
|
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11,443,951
|
|
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10,721,272
|
|
||
Net debt issuance costs and other
|
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76,722
|
|
|
72,644
|
|
||
Noncurrent derivative assets
|
|
2,653
|
|
|
—
|
|
||
Total assets
|
|
$
|
12,764,901
|
|
|
$
|
11,941,182
|
|
|
|
|
|
|
||||
Liabilities and shareholders’ equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable trade
|
|
$
|
946,123
|
|
|
$
|
885,289
|
|
Revenues and royalties payable
|
|
325,550
|
|
|
291,772
|
|
||
Payables to affiliated parties
|
|
6,228
|
|
|
5,436
|
|
||
Accrued liabilities and other
|
|
189,291
|
|
|
198,113
|
|
||
Derivative liabilities
|
|
98,493
|
|
|
90,535
|
|
||
Current portion of long-term debt
|
|
2,029
|
|
|
2,011
|
|
||
Total current liabilities
|
|
1,567,714
|
|
|
1,473,156
|
|
||
Long-term debt, net of current portion
|
|
5,067,814
|
|
|
4,713,821
|
|
||
Other noncurrent liabilities:
|
|
|
|
|
||||
Deferred income tax liabilities
|
|
1,872,457
|
|
|
1,736,812
|
|
||
Asset retirement obligations, net of current portion
|
|
56,066
|
|
|
54,353
|
|
||
Noncurrent derivative liabilities
|
|
6,117
|
|
|
7,829
|
|
||
Other noncurrent liabilities
|
|
6,972
|
|
|
2,093
|
|
||
Total other noncurrent liabilities
|
|
1,941,612
|
|
|
1,801,087
|
|
||
Commitments and contingencies (Note 7)
|
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
|
||||
Preferred stock, $0.01 par value; 25,000,000 shares authorized; no shares issued and outstanding
|
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; 500,000,000 shares authorized; 186,080,087 shares issued and outstanding at March 31, 2014; 185,658,659 shares issued and outstanding at December 31, 2013
|
|
1,861
|
|
|
1,857
|
|
||
Additional paid-in capital
|
|
1,260,439
|
|
|
1,252,034
|
|
||
Retained earnings
|
|
2,925,461
|
|
|
2,699,227
|
|
||
Total shareholders’ equity
|
|
4,187,761
|
|
|
3,953,118
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
12,764,901
|
|
|
$
|
11,941,182
|
|
|
|
Three months ended March 31,
|
||||||
In thousands, except per share data
|
|
2014
|
|
2013
|
||||
Revenues
|
|
|
|
|
||||
Crude oil and natural gas sales
|
|
$
|
972,147
|
|
|
$
|
756,217
|
|
Crude oil and natural gas sales to affiliates
|
|
30,186
|
|
|
19,714
|
|
||
Loss on derivative instruments, net
|
|
(39,674
|
)
|
|
(84,831
|
)
|
||
Crude oil and natural gas service operations
|
|
9,836
|
|
|
11,543
|
|
||
Total revenues
|
|
972,495
|
|
|
702,643
|
|
||
|
|
|
|
|
||||
Operating costs and expenses
|
|
|
|
|
||||
Production expenses
|
|
75,976
|
|
|
61,318
|
|
||
Production and other expenses to affiliates
|
|
910
|
|
|
486
|
|
||
Production taxes and other expenses
|
|
78,302
|
|
|
64,842
|
|
||
Exploration expenses
|
|
4,813
|
|
|
9,814
|
|
||
Crude oil and natural gas service operations
|
|
8,074
|
|
|
8,597
|
|
||
Depreciation, depletion, amortization and accretion
|
|
272,861
|
|
|
213,678
|
|
||
Property impairments
|
|
58,208
|
|
|
40,081
|
|
||
General and administrative expenses
|
|
43,536
|
|
|
33,817
|
|
||
(Gain) loss on sale of assets, net
|
|
8,498
|
|
|
(136
|
)
|
||
Total operating costs and expenses
|
|
551,178
|
|
|
432,497
|
|
||
Income from operations
|
|
421,317
|
|
|
270,146
|
|
||
Other income (expense):
|
|
|
|
|
||||
Interest expense
|
|
(62,975
|
)
|
|
(47,475
|
)
|
||
Other
|
|
759
|
|
|
546
|
|
||
|
|
(62,216
|
)
|
|
(46,929
|
)
|
||
Income before income taxes
|
|
359,101
|
|
|
223,217
|
|
||
Provision for income taxes
|
|
132,867
|
|
|
82,590
|
|
||
Net income
|
|
$
|
226,234
|
|
|
$
|
140,627
|
|
Basic net income per share
|
|
$
|
1.23
|
|
|
$
|
0.76
|
|
Diluted net income per share
|
|
$
|
1.22
|
|
|
$
|
0.76
|
|
In thousands, except share data
|
|
Shares
outstanding |
|
Common
stock |
|
Additional
paid-in capital |
|
Retained
earnings |
|
Total
shareholders’ equity |
|||||||||
Balance at December 31, 2013
|
|
185,658,659
|
|
|
$
|
1,857
|
|
|
$
|
1,252,034
|
|
|
$
|
2,699,227
|
|
|
$
|
3,953,118
|
|
Net income (unaudited)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
226,234
|
|
|
226,234
|
|
||||
Stock-based compensation (unaudited)
|
|
—
|
|
|
—
|
|
|
11,035
|
|
|
—
|
|
|
11,035
|
|
||||
Restricted stock:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Granted (unaudited)
|
|
465,019
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Repurchased and canceled (unaudited)
|
|
(23,221
|
)
|
|
—
|
|
|
(2,630
|
)
|
|
—
|
|
|
(2,630
|
)
|
||||
Forfeited (unaudited)
|
|
(20,370
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at March 31, 2014 (unaudited)
|
|
186,080,087
|
|
|
$
|
1,861
|
|
|
$
|
1,260,439
|
|
|
$
|
2,925,461
|
|
|
$
|
4,187,761
|
|
|
|
Three months ended March 31,
|
||||||
In thousands
|
|
2014
|
|
2013
|
||||
Cash flows from operating activities
|
|
|
||||||
Net income
|
|
$
|
226,234
|
|
|
$
|
140,627
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation, depletion, amortization and accretion
|
|
281,115
|
|
|
215,464
|
|
||
Property impairments
|
|
58,208
|
|
|
40,081
|
|
||
Non-cash loss on derivatives, net
|
|
6,410
|
|
|
78,021
|
|
||
Stock-based compensation
|
|
11,039
|
|
|
9,242
|
|
||
Provision for deferred income taxes
|
|
131,315
|
|
|
82,590
|
|
||
Dry hole costs
|
|
—
|
|
|
2,261
|
|
||
(Gain) loss on sale of assets, net
|
|
8,498
|
|
|
(136
|
)
|
||
Other, net
|
|
1,754
|
|
|
1,390
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
(53,857
|
)
|
|
(78,118
|
)
|
||
Inventories
|
|
(17,669
|
)
|
|
(14,995
|
)
|
||
Prepaid expenses and other
|
|
(525
|
)
|
|
(984
|
)
|
||
Accounts payable trade
|
|
13,854
|
|
|
5,068
|
|
||
Revenues and royalties payable
|
|
34,623
|
|
|
(69
|
)
|
||
Accrued liabilities and other
|
|
(9,191
|
)
|
|
(22,340
|
)
|
||
Other noncurrent assets and liabilities
|
|
(1,146
|
)
|
|
9
|
|
||
Net cash provided by operating activities
|
|
690,662
|
|
|
458,111
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
||||
Exploration and development
|
|
(993,682
|
)
|
|
(857,523
|
)
|
||
Purchase of producing crude oil and natural gas properties
|
|
(30,278
|
)
|
|
(3,332
|
)
|
||
Purchase of other property and equipment
|
|
(30,953
|
)
|
|
(12,649
|
)
|
||
Proceeds from sale of assets
|
|
35,433
|
|
|
351
|
|
||
Net cash used in investing activities
|
|
(1,019,480
|
)
|
|
(873,153
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
||||
Credit facility borrowings
|
|
525,000
|
|
|
440,000
|
|
||
Repayment of credit facility
|
|
(170,000
|
)
|
|
—
|
|
||
Repayment of other debt
|
|
(499
|
)
|
|
(485
|
)
|
||
Debt issuance costs
|
|
—
|
|
|
(168
|
)
|
||
Repurchase of equity grants
|
|
(2,630
|
)
|
|
(1,488
|
)
|
||
Net cash provided by financing activities
|
|
351,871
|
|
|
437,859
|
|
||
Net change in cash and cash equivalents
|
|
23,053
|
|
|
22,817
|
|
||
Cash and cash equivalents at beginning of period
|
|
28,482
|
|
|
35,729
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
51,535
|
|
|
$
|
58,546
|
|
In thousands
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Tubular goods and equipment
|
|
$
|
11,182
|
|
|
$
|
11,139
|
|
Crude oil
|
|
60,927
|
|
|
43,301
|
|
||
Total
|
|
$
|
72,109
|
|
|
$
|
54,440
|
|
MBbls
|
|
March 31, 2014
|
|
December 31, 2013
|
||
Crude oil line fill and tank requirements
|
|
501
|
|
|
370
|
|
Temporarily stored crude oil
|
|
607
|
|
|
344
|
|
Total
|
|
1,108
|
|
|
714
|
|
|
|
Three months ended March 31,
|
||||||
In thousands, except per share data
|
|
2014
|
|
2013
|
||||
Income (numerator):
|
|
|
|
|
||||
Net income - basic and diluted
|
|
$
|
226,234
|
|
|
$
|
140,627
|
|
Weighted average shares (denominator):
|
|
|
|
|
||||
Weighted average shares - basic
|
|
184,329
|
|
|
183,999
|
|
||
Non-vested restricted stock
|
|
699
|
|
|
657
|
|
||
Weighted average shares - diluted
|
|
185,028
|
|
|
184,656
|
|
||
Net income per share:
|
|
|
|
|
||||
Basic
|
|
$
|
1.23
|
|
|
$
|
0.76
|
|
Diluted
|
|
$
|
1.22
|
|
|
$
|
0.76
|
|
|
|
Three months ended March 31,
|
||||||
In thousands
|
|
2014
|
|
2013
|
||||
Supplemental cash flow information:
|
|
|
|
|
||||
Cash paid for interest
|
|
$
|
52,194
|
|
|
$
|
53,169
|
|
Cash paid for income taxes
|
|
—
|
|
|
11,049
|
|
||
Cash received for income tax refunds
|
|
(5
|
)
|
|
(8
|
)
|
||
Non-cash investing activities:
|
|
|
|
|
||||
Increase in accrued capital expenditures
|
|
47,508
|
|
|
42,214
|
|
||
Asset retirement obligation additions and revisions, net
|
|
1,270
|
|
|
2,227
|
|
Crude Oil - NYMEX WTI
|
|
|
|
Swaps Weighted Average
Price |
|||
|
|
|
|
||||
Period and Type of Contract
|
|
Bbls
|
|
||||
April 2014 - December 2014
|
|
|
|
|
|||
Swaps - WTI
|
|
9,968,750
|
|
|
$
|
96.22
|
|
|
|
|
|
|
|
Collars
|
|||||||||||||||||
Crude Oil - ICE Brent
|
|
|
|
Swaps Weighted Average Price
|
|
Floors
|
|
Ceilings
|
|||||||||||||||
|
|
|
|
|
|
|
Weighted Average
Price |
|
|
|
Weighted Average
Price |
||||||||||||
Period and Type of Contract
|
|
Bbls
|
|
|
Range
|
|
|
Range
|
|
||||||||||||||
April 2014 - December 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Swaps - ICE Brent
|
|
13,293,000
|
|
|
$
|
103.24
|
|
|
|
|
|
|
|
|
|
||||||||
Collars - ICE Brent
|
|
1,650,000
|
|
|
|
|
$90.00 - $95.00
|
|
|
$
|
90.83
|
|
|
$104.70 - $108.85
|
|
|
$
|
107.13
|
|
||||
January 2015 - December 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Swaps - ICE Brent
|
|
17,337,500
|
|
|
$
|
100.67
|
|
|
|
|
|
|
|
|
|
||||||||
Collars - ICE Brent
|
|
730,000
|
|
|
|
|
$
|
95.00
|
|
|
$
|
95.00
|
|
|
$
|
107.40
|
|
|
$
|
107.40
|
|
|
|
|
|
|
|
Collars
|
|||||||||||||
Natural Gas - NYMEX Henry Hub
|
|
Swaps Weighted Average Price
|
|
Floors
|
|
Ceilings
|
|||||||||||||
|
|
|
|
|
|
|
Weighted Average Price
|
|
|
|
Weighted Average Price
|
||||||||
Period and Type of Contract
|
|
MMBtus
|
|
|
Range
|
|
|
Range
|
|
||||||||||
April 2014 - December 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Swaps - Henry Hub
|
|
88,485,000
|
|
|
$
|
4.21
|
|
|
|
|
|
|
|
|
|
||||
January 2015 - December 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Swaps - Henry Hub
|
|
24,500,000
|
|
|
$
|
4.27
|
|
|
|
|
|
|
|
|
|
||||
Collars - Henry Hub
|
|
29,200,000
|
|
|
|
|
$3.50 - $3.75
|
|
$
|
3.69
|
|
|
$4.89 - $5.48
|
|
$
|
5.04
|
|
||
January 2016 - December 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Swaps - Henry Hub
|
|
4,550,000
|
|
|
$
|
4.27
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
||||||
In thousands
|
|
2014
|
|
2013
|
||||
Cash received (paid) on derivatives:
|
|
|
|
|
||||
Crude oil fixed price swaps
|
|
$
|
(22,523
|
)
|
|
$
|
(9,593
|
)
|
Crude oil collars
|
|
(584
|
)
|
|
125
|
|
||
Natural gas fixed price swaps
|
|
(10,157
|
)
|
|
2,658
|
|
||
Cash paid on derivatives, net
|
|
(33,264
|
)
|
|
(6,810
|
)
|
||
Non-cash gain (loss) on derivatives:
|
|
|
|
|
||||
Crude oil fixed price swaps
|
|
13,690
|
|
|
(33,364
|
)
|
||
Crude oil collars
|
|
5,283
|
|
|
(13,762
|
)
|
||
Natural gas fixed price swaps
|
|
(25,401
|
)
|
|
(30,895
|
)
|
||
Natural gas collars
|
|
18
|
|
|
—
|
|
||
Non-cash loss on derivatives, net
|
|
(6,410
|
)
|
|
(78,021
|
)
|
||
Loss on derivative instruments, net
|
|
$
|
(39,674
|
)
|
|
$
|
(84,831
|
)
|
In thousands
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Commodity derivative assets:
|
|
|
|
|
||||
Gross amounts of recognized assets
|
|
$
|
3,682
|
|
|
$
|
4,213
|
|
Gross amounts offset on balance sheet
|
|
(230
|
)
|
|
(597
|
)
|
||
Net amounts of assets on balance sheet
|
|
$
|
3,452
|
|
|
$
|
3,616
|
|
Commodity derivative liabilities:
|
|
|
|
|
||||
Gross amounts of recognized liabilities
|
|
$
|
(121,287
|
)
|
|
$
|
(125,709
|
)
|
Gross amounts offset on balance sheet
|
|
16,677
|
|
|
27,345
|
|
||
Net amounts of liabilities on balance sheet
|
|
$
|
(104,610
|
)
|
|
$
|
(98,364
|
)
|
In thousands
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Derivative assets
|
|
$
|
799
|
|
|
$
|
3,616
|
|
Noncurrent derivative assets
|
|
2,653
|
|
|
—
|
|
||
Net amounts of assets on balance sheet
|
|
3,452
|
|
|
3,616
|
|
||
Derivative liabilities
|
|
(98,493
|
)
|
|
(90,535
|
)
|
||
Noncurrent derivative liabilities
|
|
(6,117
|
)
|
|
(7,829
|
)
|
||
Net amounts of liabilities on balance sheet
|
|
(104,610
|
)
|
|
(98,364
|
)
|
||
Total derivative liabilities, net
|
|
$
|
(101,158
|
)
|
|
$
|
(94,748
|
)
|
•
|
Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the reporting date.
|
•
|
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. These are inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
|
•
|
Level 3: Unobservable inputs that are not corroborated by market data and may be used with internally developed methodologies that result in management’s best estimate of fair value.
|
|
|
Fair value measurements at March 31, 2014 using:
|
|
|
||||||||||||
In thousands
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Description
|
|
|
||||||||||||||
Derivative assets (liabilities):
|
|
|
|
|
|
|
|
|
||||||||
Fixed price swaps
|
|
$
|
—
|
|
|
$
|
(96,604
|
)
|
|
$
|
—
|
|
|
$
|
(96,604
|
)
|
Collars
|
|
—
|
|
|
(4,554
|
)
|
|
—
|
|
|
(4,554
|
)
|
||||
Total
|
|
$
|
—
|
|
|
$
|
(101,158
|
)
|
|
$
|
—
|
|
|
$
|
(101,158
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Fair value measurements at December 31, 2013 using:
|
|
|
||||||||||||
In thousands
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Description
|
|
|
||||||||||||||
Derivative assets (liabilities):
|
|
|
|
|
|
|
|
|
||||||||
Fixed price swaps
|
|
$
|
—
|
|
|
$
|
(84,893
|
)
|
|
$
|
—
|
|
|
$
|
(84,893
|
)
|
Collars
|
|
—
|
|
|
(9,855
|
)
|
|
—
|
|
|
(9,855
|
)
|
||||
Total
|
|
$
|
—
|
|
|
$
|
(94,748
|
)
|
|
$
|
—
|
|
|
$
|
(94,748
|
)
|
Unobservable Input
|
|
Assumption
|
Future production
|
|
Future production estimates for each property
|
Forward commodity prices
|
|
Forward NYMEX swap prices through 2018 (adjusted for differentials), escalating 3% per year thereafter
|
Operating and development costs
|
|
Estimated costs for the current year, escalating 3% per year thereafter
|
Productive life of field
|
|
Ranging from 0 to 50 years
|
Discount rate
|
|
10%
|
|
|
Three months ended March 31,
|
||||||
In thousands
|
|
2014
|
|
2013
|
||||
Proved property impairments
|
|
$
|
3,762
|
|
|
$
|
—
|
|
Unproved property impairments
|
|
54,446
|
|
|
40,081
|
|
||
Total
|
|
$
|
58,208
|
|
|
$
|
40,081
|
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||
In thousands
|
|
Carrying
Amount
|
|
Fair Value
|
|
Carrying
Amount
|
|
Fair Value
|
||||||||
Debt:
|
|
|
||||||||||||||
Credit facility
|
|
$
|
630,000
|
|
|
$
|
630,000
|
|
|
$
|
275,000
|
|
|
$
|
275,000
|
|
Note payable
|
|
17,971
|
|
|
16,174
|
|
|
18,470
|
|
|
16,500
|
|
||||
8 1/4% Senior Notes due 2019
|
|
298,363
|
|
|
324,000
|
|
|
298,305
|
|
|
327,800
|
|
||||
7 3/8% Senior Notes due 2020
|
|
198,732
|
|
|
224,640
|
|
|
198,695
|
|
|
223,700
|
|
||||
7 1/8% Senior Notes due 2021
|
|
400,000
|
|
|
452,120
|
|
|
400,000
|
|
|
450,300
|
|
||||
5% Senior Notes due 2022
|
|
2,024,777
|
|
|
2,105,000
|
|
|
2,025,362
|
|
|
2,063,300
|
|
||||
4 1/2% Senior Notes due 2023
|
|
1,500,000
|
|
|
1,555,650
|
|
|
1,500,000
|
|
|
1,519,400
|
|
||||
Total debt
|
|
$
|
5,069,843
|
|
|
$
|
5,307,584
|
|
|
$
|
4,715,832
|
|
|
$
|
4,876,000
|
|
In thousands
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Credit facility
|
|
$
|
630,000
|
|
|
$
|
275,000
|
|
Note payable
|
|
17,971
|
|
|
18,470
|
|
||
8 1/4% Senior Notes due 2019 (1)
|
|
298,363
|
|
|
298,305
|
|
||
7 3/8% Senior Notes due 2020 (2)
|
|
198,732
|
|
|
198,695
|
|
||
7 1/8% Senior Notes due 2021 (3)
|
|
400,000
|
|
|
400,000
|
|
||
5% Senior Notes due 2022 (4)
|
|
2,024,777
|
|
|
2,025,362
|
|
||
4 1/2% Senior Notes due 2023 (3)
|
|
1,500,000
|
|
|
1,500,000
|
|
||
Total debt
|
|
$
|
5,069,843
|
|
|
$
|
4,715,832
|
|
Less: Current portion of long-term debt
|
|
(2,029
|
)
|
|
(2,011
|
)
|
||
Long-term debt, net of current portion
|
|
$
|
5,067,814
|
|
|
$
|
4,713,821
|
|
(1)
|
The carrying amount is net of unamortized discounts of
$1.6 million
and
$1.7 million
at
March 31, 2014
and
December 31, 2013
, respectively.
|
(2)
|
The carrying amount is net of unamortized discounts of
$1.3 million
and
$1.3 million
at
March 31, 2014
and
December 31, 2013
, respectively.
|
(3)
|
These notes were sold at par and are recorded at
100%
of face value.
|
(4)
|
The carrying amount includes an unamortized premium of
$24.8 million
and
$25.4 million
at
March 31, 2014
and
December 31, 2013
, respectively.
|
|
|
2019 Notes
|
|
2020 Notes
|
|
2021 Notes
|
|
2022 Notes
|
|
2023 Notes
|
Maturity date
|
|
Oct 1, 2019
|
|
Oct 1, 2020
|
|
April 1, 2021
|
|
Sep 15, 2022
|
|
April 15, 2023
|
Interest payment dates
|
|
April 1, Oct. 1
|
|
April 1, Oct. 1
|
|
April 1, Oct. 1
|
|
March 15, Sept. 15
|
|
April 15, Oct. 15
|
Call premium redemption period (1)
|
|
Oct 1, 2014
|
|
Oct 1, 2015
|
|
April 1, 2016
|
|
March 15, 2017
|
|
—
|
Make-whole redemption period (2)
|
|
Oct 1, 2014
|
|
Oct 1, 2015
|
|
April 1, 2016
|
|
March 15, 2017
|
|
Jan 15, 2023
|
Equity offering redemption period (3)
|
|
—
|
|
—
|
|
—
|
|
March 15, 2015
|
|
—
|
(1)
|
On or after these dates, the Company has the option to redeem all or a portion of its senior notes at the decreasing redemption prices specified in the respective senior note indentures (together, the “Indentures”) plus any accrued and unpaid interest to the date of redemption.
|
(2)
|
At any time prior to these dates, the Company has the option to redeem all or a portion of its senior notes at the “make-whole” redemption prices or amounts specified in the Indentures plus any accrued and unpaid interest to the date of redemption.
|
(3)
|
At any time prior to this date, the Company may redeem up to
35%
of the principal amount of its 2022 Notes under certain circumstances with the net cash proceeds from one or more equity offerings at the redemption price specified in the indenture for the 2022 Notes plus any accrued and unpaid interest to the date of redemption.
|
|
|
Three months ended March 31,
|
||||||
In thousands
|
|
2014
|
|
2013
|
||||
Non-cash equity compensation
|
|
$
|
11,039
|
|
|
$
|
9,242
|
|
|
|
Number of
non-vested shares |
|
Weighted
average grant-date fair value |
|||
Non-vested restricted shares outstanding at December 31, 2013
|
|
1,357,156
|
|
|
$
|
74.99
|
|
Granted
|
|
465,019
|
|
|
118.18
|
|
|
Vested
|
|
(71,432
|
)
|
|
77.41
|
|
|
Forfeited
|
|
(20,370
|
)
|
|
76.29
|
|
|
Non-vested restricted shares outstanding at March 31, 2014
|
|
1,730,373
|
|
|
$
|
86.48
|
|
ITEM 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Volumes of crude oil and natural gas produced,
|
•
|
Crude oil and natural gas prices realized,
|
•
|
Per unit operating and administrative costs, and
|
•
|
EBITDAX (a non-GAAP financial measure).
|
|
|
Three months ended March 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Average daily production:
|
|
|
|
|
||||
Crude oil (Bbl per day)
|
|
106,398
|
|
|
86,071
|
|
||
Natural gas (Mcf per day)
|
|
276,439
|
|
|
212,766
|
|
||
Crude oil equivalents (Boe per day)
|
|
152,471
|
|
|
121,532
|
|
||
Average sales prices:
|
|
|
|
|
||||
Crude oil ($/Bbl)
|
|
$
|
89.73
|
|
|
$
|
89.99
|
|
Natural gas ($/Mcf)
|
|
$
|
7.06
|
|
|
$
|
4.59
|
|
Crude oil equivalents ($/Boe)
|
|
$
|
75.03
|
|
|
$
|
71.61
|
|
Crude oil sales price differential to NYMEX ($/Bbl)
|
|
$
|
(8.98
|
)
|
|
$
|
(4.29
|
)
|
Natural gas sales price premium to NYMEX ($/Mcf)
|
|
$
|
2.14
|
|
|
$
|
1.25
|
|
Production expenses ($/Boe)
|
|
$
|
5.76
|
|
|
$
|
5.70
|
|
Production taxes (% of oil and gas revenues)
|
|
7.7
|
%
|
|
8.3
|
%
|
||
DD&A ($/Boe)
|
|
$
|
20.43
|
|
|
$
|
19.72
|
|
General and administrative expenses ($/Boe)
|
|
$
|
2.43
|
|
|
$
|
2.26
|
|
Non-cash equity compensation ($/Boe)
|
|
$
|
0.83
|
|
|
$
|
0.85
|
|
Net income (in thousands)
|
|
$
|
226,234
|
|
|
$
|
140,627
|
|
Diluted net income per share
|
|
$
|
1.22
|
|
|
$
|
0.76
|
|
EBITDAX (in thousands) (1)
|
|
$
|
775,407
|
|
|
$
|
621,528
|
|
(1)
|
EBITDAX represents earnings before interest expense, income taxes, depreciation, depletion, amortization and accretion, property impairments, exploration expenses, non-cash gains and losses resulting from the requirements of accounting for derivatives, and non-cash equity compensation expense. EBITDAX is not a measure of net income or operating cash flows as determined by U.S. GAAP. Reconciliations of net income and operating cash flows to EBITDAX are provided subsequently under the heading
Non-GAAP Financial Measures
.
|
|
|
Three months ended March 31,
|
||||||
In thousands, except sales price data
|
|
2014
|
|
2013
|
||||
Crude oil and natural gas sales
|
|
$
|
1,002,333
|
|
|
$
|
775,931
|
|
Loss on derivative instruments, net (1)
|
|
(39,674
|
)
|
|
(84,831
|
)
|
||
Crude oil and natural gas service operations
|
|
9,836
|
|
|
11,543
|
|
||
Total revenues
|
|
972,495
|
|
|
702,643
|
|
||
Operating costs and expenses
|
|
(551,178
|
)
|
|
(432,497
|
)
|
||
Other expenses, net
|
|
(62,216
|
)
|
|
(46,929
|
)
|
||
Income before income taxes
|
|
359,101
|
|
|
223,217
|
|
||
Provision for income taxes
|
|
(132,867
|
)
|
|
(82,590
|
)
|
||
Net income
|
|
$
|
226,234
|
|
|
$
|
140,627
|
|
Production volumes:
|
|
|
|
|
||||
Crude oil (MBbl) (2)
|
|
9,576
|
|
|
7,746
|
|
||
Natural gas (MMcf)
|
|
24,879
|
|
|
19,149
|
|
||
Crude oil equivalents (MBoe)
|
|
13,722
|
|
|
10,938
|
|
||
Sales volumes:
|
|
|
|
|
||||
Crude oil (MBbl) (2)
|
|
9,213
|
|
|
7,645
|
|
||
Natural gas (MMcf)
|
|
24,879
|
|
|
19,149
|
|
||
Crude oil equivalents (MBoe)
|
|
13,359
|
|
|
10,836
|
|
||
Average sales prices:
|
|
|
|
|
||||
Crude oil ($/Bbl)
|
|
$
|
89.73
|
|
|
$
|
89.99
|
|
Natural gas ($/Mcf)
|
|
7.06
|
|
|
4.59
|
|
||
Crude oil equivalents ($/Boe)
|
|
75.03
|
|
|
71.61
|
|
(1)
|
Amounts include non-cash mark-to-market losses on derivatives of
$6.4 million
and
$78.0 million
for the three months ended
March 31, 2014
and
2013
, respectively.
|
(2)
|
At various times we have stored crude oil due to pipeline line fill requirements, low commodity prices, or transportation constraints or we have sold crude oil from inventory. These actions result in differences between produced and sold crude oil volumes. Crude oil sales volumes were
363
MBbls
less
than crude oil production for the three months ended
March 31, 2014
and
101
MBbls
less
than crude oil production for the three months ended
March 31, 2013
.
|
|
|
Three months ended March 31,
|
|
Volume
increase |
|
Volume
percent increase |
||||||||||||
|
|
2014
|
|
2013
|
|
|
||||||||||||
|
|
Volume
|
|
Percent
|
|
Volume
|
|
Percent
|
|
|||||||||
Crude oil (MBbl)
|
|
9,576
|
|
|
70
|
%
|
|
7,746
|
|
|
71
|
%
|
|
1,830
|
|
|
24
|
%
|
Natural gas (MMcf)
|
|
24,879
|
|
|
30
|
%
|
|
19,149
|
|
|
29
|
%
|
|
5,730
|
|
|
30
|
%
|
Total (MBoe)
|
|
13,722
|
|
|
100
|
%
|
|
10,938
|
|
|
100
|
%
|
|
2,784
|
|
|
25
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Three months ended March 31,
|
|
Volume
increase |
|
Volume
percent increase |
||||||||||||
|
|
2014
|
|
2013
|
|
|
||||||||||||
|
|
MBoe
|
|
Percent
|
|
MBoe
|
|
Percent
|
|
|||||||||
North Region
|
|
10,118
|
|
|
74
|
%
|
|
8,392
|
|
|
77
|
%
|
|
1,726
|
|
|
21
|
%
|
South Region
|
|
3,604
|
|
|
26
|
%
|
|
2,546
|
|
|
23
|
%
|
|
1,058
|
|
|
42
|
%
|
Total
|
|
13,722
|
|
|
100
|
%
|
|
10,938
|
|
|
100
|
%
|
|
2,784
|
|
|
25
|
%
|
|
|
Three months ended March 31,
|
||||||
In thousands
|
|
2014
|
|
2013
|
||||
Cash received (paid) on derivatives:
|
|
|
|
|
||||
Crude oil derivatives
|
|
$
|
(23,107
|
)
|
|
$
|
(9,468
|
)
|
Natural gas derivatives
|
|
(10,157
|
)
|
|
2,658
|
|
||
Cash paid on derivatives, net
|
|
(33,264
|
)
|
|
(6,810
|
)
|
||
Non-cash gain (loss) on derivatives:
|
|
|
|
|
||||
Crude oil derivatives
|
|
18,973
|
|
|
(47,126
|
)
|
||
Natural gas derivatives
|
|
(25,383
|
)
|
|
(30,895
|
)
|
||
Non-cash loss on derivatives, net
|
|
(6,410
|
)
|
|
(78,021
|
)
|
||
Loss on derivative instruments, net
|
|
$
|
(39,674
|
)
|
|
$
|
(84,831
|
)
|
|
|
Three months ended March 31,
|
||||||
In thousands
|
|
2014
|
|
2013
|
||||
Geological and geophysical costs
|
|
$
|
4,813
|
|
|
$
|
7,553
|
|
Dry hole costs
|
|
—
|
|
|
2,261
|
|
||
Exploration expenses
|
|
$
|
4,813
|
|
|
$
|
9,814
|
|
|
|
Three months ended March 31,
|
||||||
$/Boe
|
|
2014
|
|
2013
|
||||
Crude oil and natural gas
|
|
$
|
20.08
|
|
|
$
|
19.43
|
|
Other equipment
|
|
0.29
|
|
|
0.23
|
|
||
Asset retirement obligation accretion
|
|
0.06
|
|
|
0.06
|
|
||
Depreciation, depletion, amortization and accretion
|
|
$
|
20.43
|
|
|
$
|
19.72
|
|
|
|
Three months ended March 31,
|
||||||
$/Boe
|
|
2014
|
|
2013
|
||||
General and administrative expenses
|
|
$
|
2.43
|
|
|
$
|
2.20
|
|
Non-cash equity compensation
|
|
0.83
|
|
|
0.85
|
|
||
Corporate relocation expenses
|
|
—
|
|
|
0.06
|
|
||
Total general and administrative expenses
|
|
$
|
3.26
|
|
|
$
|
3.11
|
|
In millions
|
Amount
|
||
Exploration and development drilling
|
$
|
3,540
|
|
Land costs
|
300
|
|
|
Capital facilities, workovers and other corporate assets
|
180
|
|
|
Seismic
|
30
|
|
|
Total 2014 capital budget, excluding acquisitions
|
$
|
4,050
|
|
In millions
|
Amount
|
||
Exploration and development drilling
|
$
|
902.2
|
|
Land costs
|
83.5
|
|
|
Capital facilities, workovers and other corporate assets
|
48.4
|
|
|
Seismic
|
2.9
|
|
|
Capital expenditures, excluding acquisitions
|
1,037.0
|
|
|
Acquisitions of producing properties
|
30.3
|
|
|
Acquisitions of non-producing properties
|
36.1
|
|
|
Total acquisitions
|
66.4
|
|
|
Total capital expenditures
|
$
|
1,103.4
|
|
|
|
Three months ended March 31,
|
||||||
In thousands
|
|
2014
|
|
2013
|
||||
Net income
|
|
$
|
226,234
|
|
|
$
|
140,627
|
|
Interest expense
|
|
62,975
|
|
|
47,475
|
|
||
Provision for income taxes
|
|
132,867
|
|
|
82,590
|
|
||
Depreciation, depletion, amortization and accretion
|
|
272,861
|
|
|
213,678
|
|
||
Property impairments
|
|
58,208
|
|
|
40,081
|
|
||
Exploration expenses
|
|
4,813
|
|
|
9,814
|
|
||
Impact from derivative instruments:
|
|
|
|
|
||||
Total loss on derivatives, net
|
|
39,674
|
|
|
84,831
|
|
||
Total cash paid on derivatives, net
|
|
(33,264
|
)
|
|
(6,810
|
)
|
||
Non-cash loss on derivatives, net
|
|
6,410
|
|
|
78,021
|
|
||
Non-cash equity compensation
|
|
11,039
|
|
|
9,242
|
|
||
EBITDAX
|
|
$
|
775,407
|
|
|
$
|
621,528
|
|
|
|
Three months ended March 31,
|
||||||
In thousands
|
|
2014
|
|
2013
|
||||
Net cash provided by operating activities
|
|
$
|
690,662
|
|
|
$
|
458,111
|
|
Current income tax provision
|
|
1,552
|
|
|
—
|
|
||
Interest expense
|
|
62,975
|
|
|
47,475
|
|
||
Exploration expenses, excluding dry hole costs
|
|
4,813
|
|
|
7,553
|
|
||
Gain (loss) on sale of assets, net
|
|
(8,498
|
)
|
|
136
|
|
||
Other, net
|
|
(10,008
|
)
|
|
(3,176
|
)
|
||
Changes in assets and liabilities
|
|
33,911
|
|
|
111,429
|
|
||
EBITDAX
|
|
$
|
775,407
|
|
|
$
|
621,528
|
|
ITEM 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
ITEM 1.
|
Legal Proceedings
|
ITEM 1A.
|
Risk Factors
|
ITEM 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
(a)
|
Recent Sales of Unregistered Securities – Not applicable.
|
(b)
|
Use of Proceeds – Not applicable.
|
Period
|
|
Total number of shares purchased (1)
|
|
Average price paid per share (2)
|
|
Total number of shares purchased as part of publicly announced plans or programs
|
|
Maximum number of shares that may yet be purchased under the plans or programs (3)
|
|||||
January 1, 2014 to January 31, 2014
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
February 1, 2014 to February 28, 2014
|
|
23,221
|
|
|
$
|
113.27
|
|
|
—
|
|
|
—
|
|
March 1, 2014 to March 31, 2014
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
23,221
|
|
|
$
|
113.27
|
|
|
—
|
|
|
—
|
|
(1)
|
In connection with restricted stock grants under the Company's 2005 Long-Term Incentive Plan ("2005 Plan") and 2013 Long-Term Incentive Plan ("2013 Plan"), we adopted a policy that enables employees to surrender shares to cover their tax liability. In May 2013, the 2013 Plan was adopted and replaced the Company's 2005 Plan. Restricted stock awards granted under the 2005 Plan prior to the adoption of the 2013 Plan will remain outstanding in accordance with their terms. All shares purchased above represent shares surrendered to cover tax liabilities. We paid the associated taxes to the Internal Revenue Service.
|
(2)
|
The price paid per share was the closing price of our common stock on the date the restrictions lapsed on such shares.
|
(3)
|
We are unable to determine at this time the total amount of securities or approximate dollar value of securities that could potentially be surrendered to us pursuant to our policy that enables employees to surrender shares to cover their tax liability associated with the vesting of restrictions on shares.
|
ITEM 3.
|
Defaults Upon Senior Securities
|
ITEM 4.
|
Mine Safety Disclosures
|
ITEM 6.
|
Exhibits
|
|
|
CONTINENTAL RESOURCES, INC.
|
||
|
|
|
|
|
Date:
|
May 7, 2014
|
By:
|
|
/s/ John D. Hart
|
|
|
|
|
John D. Hart
|
|
|
|
|
Sr. Vice President, Chief Financial Officer and Treasurer
(Duly Authorized Officer and Principal Financial Officer) |
3.1
|
Third Amended and Restated Certificate of Incorporation of Continental Resources, Inc. filed February 24, 2012 as Exhibit 3.1 to the Company’s 2011 Form 10-K (Commission File No. 001-32886) and incorporated herein by reference.
|
|
|
3.2
|
Third Amended and Restated Bylaws of Continental Resources, Inc. filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (Commission File No. 001-32886) filed November 6, 2012 and incorporated herein by reference.
|
|
|
10.1*†
|
First Amendment to the Continental Resources, Inc. Deferred Compensation Plan.
|
|
|
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).
|
|
|
32**
|
Certification of the Company’s Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).
|
|
|
101.INS**
|
XBRL Instance Document
|
|
|
101.SCH**
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL**
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.DEF**
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB**
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.PRE**
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
†
|
Management contract or compensatory plan or arrangement filed pursuant to Item 601(b)(10)(iii) of Regulation S-K.
|
1.
|
I have reviewed this report on Form 10-Q for the period ended
March 31, 2014
of Continental Resources, Inc. (“Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors:
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
/s/ Harold G. Hamm
|
Harold G. Hamm
|
Chairman of the Board and
Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-Q for the period ended
March 31, 2014
of Continental Resources, Inc. (“Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors:
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
/s/ John D. Hart
|
John D. Hart
|
Sr. Vice President, Chief Financial Officer and Treasurer
|
/s/ Harold G. Hamm
|
|
/s/ John D. Hart
|
Harold G. Hamm
|
|
John D. Hart
|
Chairman of the Board and
Chief Executive Officer
|
|
Sr. Vice President, Chief Financial Officer and
Treasurer
|
May 7, 2014
|
|
May 7, 2014
|