Continental Resources Inc. (CLR:US), the biggest petroleum leaseholder in North Dakota and Montana’s Bakken Shale, dropped the most in more than eight months after boosting capital spending by 31 percent to increase production.
Continental, based in Oklahoma City, declined (CLR:US) 9.3 percent to $81.94 at the close in New York, the biggest decline since Aug. 18, 2011.
The company yesterday raised its 2012 capital budget to $2.3 billion excluding acquisitions, compared with a previous forecast of $1.75 billion. Continental said its production growth for the year is expected to be 47 percent to 50 percent, surpassing an earlier estimate of 37 percent to 40 percent.
“People felt like this company would be able to really increase their full-year production guidance range without bringing the capex up,” said Brian Lively, an analyst at Tudor, Pickering, Holt & Co. in Houston. “That was not our analysis, but I think it was just a situation where expectations were higher than what the company could possibly deliver.”
Lively, who spoke in a telephone interview today, has a hold rating on Continental shares and doesn’t own any.
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