Like EOG, Continental Resources (CLR) is a beast in its core production area, North Dakota’s Bakken shale. And like EOD, CLR has seen its production surge as it continues to frack the formation with gusto.
And like EOG, CLR stock is up huge in 2013 — racking up an impressive 43% gain for shareholders. Which means it may be time to sell some and move on to more undervalued pastures. That position trimming could even be more prudent because rising production for CLR is a bit of a Catch-22.
That’s because there’ still a huge glut of Bakken crude that can’t leave the region. Crude-by-rail is growing, but there’s still insufficient pipeline infrastructure to carry CLR’s production down to refiners on the Gulf. Overall, lower WTI crude prices because of the glut hinders CLR’s earnings and rising production.
And with investors in CLR shares up big, the time could be right to sell some of those gains and move on.