732834--2/27/2009--CONTINENTAL_RESOURCES

related topics

{gas, price, oil}

{loss, insurance, financial}

{operation, natural, condition}

{capital, credit, financial}

{regulation, government, change}

{debt, indebtedness, cash}

{interest, director, officer}

{cost, regulation, environmental}

{stock, price, operating}

{personnel, key, retain}

{regulation, change, law}

{acquisition, growth, future}

You should carefully consider each of the risks described below, together with all of the other information contained in this report, before deciding to invest in shares of our common stock. If any of the following risks develop into actual events, our business, financial condition or results of operations could be materially adversely affected, the trading price of your shares could decline and you may lose all or part of your investment. Risks Relating to the Oil and Natural Gas Industry and Our Business A substantial or extended decline in oil and natural gas prices may adversely affect our business, financial condition or results of operations and our ability to meet our capital expenditure obligations and financial commitments. Our exploration, development and exploitation projects require substantial capital expenditures. We may be unable to obtain needed capital or financing on satisfactory terms, which could lead to a decline in our oil and natural gas reserves. Drilling for and producing oil and natural gas are high risk activities with many uncertainties that could adversely affect our business, financial condition or results of operations. Reserve estimates depend on many assumptions that may turn out to be inaccurate. Any material inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves. Our use of enhanced recovery methods creates uncertainties that could adversely affect our results of operations and financial condition. If oil and natural gas prices decrease, we may be required to take write-downs of the carrying values of our oil and natural gas properties. Unless we replace our oil and natural gas reserves, our reserves and production will decline, which would adversely affect our cash flows and results of operations. The unavailability or high cost of additional drilling rigs, equipment, supplies, personnel and oilfield services could adversely affect our ability to execute our exploration and development plans within our budget and on a timely basis. We may incur substantial losses and be subject to substantial liability claims as a result of our oil and natural gas operations. Additionally we may not be insured for, or our insurance may be inadequate to protect us against, these risks. Prospects that we decide to drill may not yield oil or natural gas in commercially viable quantities. Our identified drilling locations are scheduled out over several years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling. Market conditions or operational impediments may hinder our access to oil and natural gas markets or delay our production. We have been an early entrant into new or emerging plays. As a result, our drilling results in these areas are uncertain, and the value of our undeveloped acreage will decline if drilling results are unsuccessful. We are subject to complex federal, state, local, provincial and other laws and regulations that could adversely affect the cost, manner or feasibility of conducting our operations or expose us to significant liabilities. Should we fail to comply with all applicable FERC administered statutes, rules, regulations and orders, we could be subject to substantial penalties and fines. Our operations may incur substantial liabilities in connection with climate change legislation and regulatory initiatives. Competition in the oil and natural gas industry is intense, making it more difficult for us to acquire properties, market oil and natural gas and secure trained personnel. The loss of senior management or technical personnel could adversely affect operations. Seasonal weather conditions and lease stipulations adversely affect our ability to conduct drilling activities in some of the areas where we operate. Our revolving credit facility contains certain covenants that may inhibit our ability to make certain investments, incur additional indebtedness and engage in certain other transactions, which could adversely affect our ability to meet our future goals. Increases in interest rates could adversely affect our business. The continuing financial crisis may impact our business and financial condition. We may not be able to obtain funding in the capital markets on terms we find acceptable, or obtain funding under our current revolving credit facility because of the deterioration of the capital and credit markets and our borrowing base. The inability of our significant customers to meet their obligations to us may adversely affect our financial results. Our derivative activities could result in financial losses or could reduce our earnings. We may be subject to risks in connection with acquisitions. Our business depends on oil and natural gas transportation facilities, most of which are owned by third parties. Our Chairman and Chief Executive Officer owns approximately 72.8% of our outstanding common stock, giving him influence and control in corporate transactions and other matters, including a sale of our company.

Full 10-K form ▸

732834--2/27/2009--CONTINENTAL_RESOURCES_INC