Continental Resources (CLR): A Takeout Candidate - Nomura

Nomura Securities Buy price target of $50.00 (from $25.00)

Nomura's Continental Resources (NYSE: CLR) analyst, Lloyd Byrne, expects to see upside to well productivity and well costs as the companies test larger completion optimizations, including proppant loads and lateral lengths. The market is focused on the long-term inventory number. While step-outs continue to expand viable acreage footprint, the spacing pilots across the play are the next measuring post. CLR specifically has 7 pilot programs in the SCOOP, with all but one producing. In the STACK the company is focused on the Ludwig Density pilot as it tests four wells in the upper and lower Meramec. Several peers including XEC and NFX are working on / planning pilots in 2016 as well. With uncertainty waning, and players like DVN entering the play with the purchase of Felix, the analyst expects additional consolidation as privates monetize and larger players look for meaningful positions.

No change to Buy rating but the price target doubles to $50.

For an analyst ratings summary and ratings history on Continental Resources click here. For more ratings news on Continental Resources click here.

Shares of Continental Resources closed at $40.74 yesterday.

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