Dallas, Texas 10/30/2013 (Financialstrend) – Continental Resources, Inc. (NYSE:CLR) stock posted a 5.5% decrease in their market value on October 23, when rating agency Global Hunter declared that it was downgrading the stock of this oil and gas producer from previously assigned Buy to Neutral. The firm had sighted the share price of the stock going up beyond its target of $120 as the key reason behind the downgrade of the stock. The rating firm feels that in spite of the strong financial fundamentals of the stock, it is constrained to put a neutral sign on the stock since the stock has very limited upside potential from its current valuations.
The strong performance of Continental Resources should not surprise industry watchers. The company has been named in a report taken out by U.S. Energy Information Administration. In its latest drilling productivity report, the agency has concluded that the Bakken shale has yield close to 0.91 million barrels of oil per day in the past year. Continental Resources has huge acreages in the Bakken area. The report goes on to state that in the near future; the oil reservoirs under the Bakken shale will yield close to 2 million barrels of oil per day. This should sound like sweet music to long term investors of CLR stock.
In fact Chief Executive Officer Harold Hamm of Continental Resources is quoted to have commented on the side lines of Bloomberg Oil & Gas Conference that “he does not believe the new abundance of U.S. oil will result in a crash in prices as has happened with natural gas, expecting crude to remain in the $90-$100 range for the foreseeable future.”
The stock of this $21.56 billion market capped oil producer was trading at $117.16 per share as of close of business on October 29. It has gained close to 9.2% in the past one month.