Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this report and our historical consolidated financial statements and notes included in our Form 10-K for the year ended December 31, 2025.

The following discussion and analysis includes forward-looking statements and should be read in conjunction with the risk factors, if any, described in Part II, Item 1A. Risk Factors included in this report and in our Form 10-K for the year ended December 31, 2025, along with Cautionary Statement for the Purpose of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995 at the beginning of this report, for information about the risks and uncertainties that could cause our actual results to be materially different than our forward-looking statements.

Overview

We are an independent crude oil and natural gas company engaged in the exploration, development, management, and production of crude oil and natural gas and associated products with properties primarily located in four leading basins in the United States - the Bakken field of North Dakota and Montana, the Anadarko Basin of Oklahoma, the Permian Basin of Texas, and the Powder River Basin of Wyoming. In 2026 the Company expanded its operations internationally via the acquisition of assets within the Vaca Muerta shale play in Argentina's Neuquén Basin and is evaluating opportunities to operate and develop assets in the Orinoco Oil Belt of Venezuela. As of September 30, 2026 our international activities represent an immaterial portion of our consolidated production, revenues, and assets. Additionally, we pursue the acquisition and management of perpetually owned minerals located in our key operating areas, as well as opportunities to participate and contribute in the growing power generation sector.

We derive the majority of our operating income and cash flows from the sale of crude oil, natural gas, and natural gas liquids and expect this to continue in the future. As discussed in Note 1. Organization and Nature of Business-Voluntary Filer in Notes to Unaudited Condensed Consolidated Financial Statements, Continental Resources, Inc. is a privately held corporation and has no publicly available common shares outstanding.

Third Quarter 2026 Financial and Operating Metrics

Crude oil prices increased in 2026 and have remained elevated through the date of this filing as a result of geopolitical events and conflict in the Middle East that have impacted the global supply of crude oil. Crude oil prices remain volatile and unpredictable. Average NYMEX crude oil and natural gas market prices for the periods presented are shown in the table below.

The following table contains financial and operating metrics for the periods presented. Average sales prices exclude any effect of derivative transactions. Per-unit expenses have been calculated using sales volumes.

Three months ended September 30, 2026 compared to the three months ended September 30, 2025

Results of Operations

The following table presents selected financial and operating information for the periods presented.

Production

The following table summarizes the changes in our average daily Boe production by major operating area for the third quarter period.

The following table summarizes the changes in our production by product for the third quarter period.

The 13% decrease in crude oil production and 4% increase in natural gas production in the 2026 third quarter compared to the 2025 third quarter were driven by changes in the allocation of capital between our operating areas and variation in the timing of new well completions between years.

Revenues

Our revenues consist of sales of crude oil, natural gas, and natural gas liquids, gains and losses resulting from changes in the fair value of our crude oil and natural gas derivative instruments, and revenues associated with crude oil and natural gas service operations.

Crude oil, natural gas, and natural gas liquids sales. Sales totaled $2.14 billion for the third quarter of 2026, a 17% increase compared to sales of $1.82 billion for the third quarter of 2025 due to increases in crude oil and natural gas sales prices, coupled with an increase in natural gas sales volumes, partially offset by a decrease in crude oil sales volumes.

Total sales volumes for the third quarter of 2026 decreased 2,612 MBoe, or 6%, compared to the third quarter of 2025 primarily due to the previously described decrease in crude oil production volumes. For the third quarter of 2026, our crude oil sales volumes decreased 14%, while our natural gas sales volumes increased 4% compared to the third quarter of 2025.

Our crude oil sales prices averaged $85.70 per barrel in the third quarter of 2026 compared to $65.11 per barrel for the third quarter of 2025 due to the previously described increase in market prices. Our natural gas sales prices averaged $2.89 per Mcf for the third quarter of 2026 compared to $2.10 per Mcf for the third quarter of 2025.

Derivatives. Changes in settled and future commodity prices during the third quarter of 2026 had a net unfavorable impact on the fair value of our derivatives, which resulted in negative revenue adjustments totaling $797.7 million for the period, representing $586.7 million of unsettled non-cash losses and $211.0 million of realized cash losses, compared to positive revenue adjustments totaling $184.2 million in the third quarter of 2025. The significant cash and non-cash losses recognized in the 2026 third quarter were driven by the aforementioned increase in crude oil prices in the quarter and an increase in forward crude oil prices as of September 30, 2026 compared to June 30, 2026. See Note 5. Derivative Instruments in Notes to Unaudited Condensed Consolidated Financial Statements for further information on the gains and losses recognized on our derivative instruments in the third quarter of 2026.

Operating Costs and Expenses

Production Expenses. Production expenses were consistent at $220.8 million for the third quarter of 2026 compared to $221.6 million for the third quarter of 2025. Production expenses on a per-Boe basis averaged $5.29 per Boe for the third quarter of 2026 compared to $5.00 per Boe for the third quarter of 2025 primarily due to changes in the mix of production between our operating areas between periods.

Production and Ad Valorem Taxes. Production and ad valorem taxes increased $13.9 million, or 10%, to $148.2 million for the third quarter of 2026 compared to $134.2 million for the third quarter of 2025 due to an increase in crude oil and natural gas revenues. Our production taxes as a percentage of net sales averaged 7.2% for the third quarter of 2026 compared to 7.7% for the third quarter of 2025, the decrease of which resulted from changes in sales mix of crude oil and natural gas in our operating areas between periods.

Transportation, gathering, processing, and compression. These charges decreased $7.6 million, or 9%, to $80.3 million for the third quarter of 2026 compared to $88.0 million for the third quarter of 2025 due to changes in marketing terms and arrangements utilized between periods and changes in our working interest share of cost burdens in certain operating areas.

Depreciation, Depletion, Amortization and Accretion. DD&A totaled $644.6 million for the third quarter of 2026, a decrease of $52.8 million, or 8%, compared to $697.5 million for the third quarter of 2025 primarily due to a 6% decrease in total sales volumes. The following table shows the components of our DD&A on a unit of sales basis for the periods presented.

General and Administrative Expenses. Total G&A expenses increased $52.2 million to $115.8 million for the third quarter of 2026 compared to $63.6 million for the third quarter of 2025. Such expenses include charges for incentive compensation awards of $45.0 million and $18.1 million for the third quarters of 2026 and 2025, respectively, the increase of which was driven by an upward remeasurement of outstanding award liabilities resulting from an increase in the value of the Company between periods. G&A expenses other than incentive compensation awards totaled $70.8 million for the third quarter of 2026 compared to $45.5 million for the third quarter of 2025. This increase was driven by an annual increase in employee-related costs and benefits, higher transaction costs including our expansion into international jurisdictions, software enhancements, and lower overhead and cost recoveries from joint interest owners due to a decrease in drilling and completion spending compared to the prior period. The following table shows the components of G&A expenses on a unit of sales basis for the periods presented.

Income Taxes. For the third quarters of 2026 and 2025 we provided for income taxes on our domestic pre-tax income at a combined federal and state tax rate of 23.5%. We recorded an income tax benefit of $1.8 million for the third quarter of 2026, resulting in a negative 2% effective tax rate, and an income tax provision of $188.4 million for the third quarter of 2025, which resulted in an effective tax rate of 25.3%, after taking into account the application of statutory tax rates, permanent taxable differences, estimated tax credits, and other items. The decrease in our effective tax rate for the third quarter of 2026 was primarily due to various discrete income tax benefits totaling $14.9 million recognized upon the filing of our 2025 federal income tax return.

Nine months ended September 30, 2026 compared to the nine months ended September 30, 2025

Results of Operations

The following table presents selected financial and operating information for the periods presented.

Production

The following table summarizes the changes in our average daily Boe production by major operating area for the year to date period.

The following table summarizes the changes in our production by product for the year to date period.

The 8% decrease in crude oil production and 8% increase in natural gas production for year to date 2026 compared to year to date 2025 were driven by changes in the allocation of capital between our operating areas and variation in the timing of new well completions between years.

Revenues

Crude oil, natural gas, and natural gas liquids sales. Sales for year to date 2026 totaled $6.19 billion, a 16% increase compared to $5.34 billion for the comparable 2025 period driven by increases in crude oil and natural gas sales prices, coupled with an increase in natural gas sales volumes, partially offset by a decrease in crude oil sales volumes.

Total sales volumes for year to date 2026 decreased 1,337 MBoe, or 1%, compared to year to date 2025 due to the previously described decrease in crude oil production volumes, nearly offset by an increase in natural gas production volumes. For year to date 2026, our crude oil sales volumes decreased 9%, while our natural gas sales volumes increased 8% compared to year to date 2025.

Our crude oil sales prices averaged $84.72 per barrel for year to date 2026 compared to $65.89 per barrel for year to date 2025 due to the previously described increase in market prices. Our natural gas sales prices averaged $2.79 per Mcf for year to date 2026 compared to $2.74 per Mcf for year to date 2025.

Derivatives. Changes in settled and future commodity prices during the nine months ended September 30, 2026 had a net unfavorable impact on the fair value of our derivatives, which resulted in negative revenue adjustments totaling $1.56 billion for the period, representing $598.3 million of realized cash losses and $959.6 million of unsettled non-cash losses, compared to positive revenue adjustments totaling $319.4 million in the comparable 2025 period. The significant cash and non-cash losses recognized for year to date 2026 were driven by the aforementioned increase in crude oil market prices during the period. See Note 5. Derivative Instruments in Notes to Unaudited Condensed Consolidated Financial Statements for further information on the gains and losses recognized on our derivative instruments for year to date 2026.

Operating Costs and Expenses

Production Expenses. Production expenses increased $27.9 million, or 4%, to $650.3 million for year to date 2026 compared to $622.4 million for year to date 2025 primarily due to higher workover-related activities aimed at enhancing production from producing properties. Production expenses on a per-Boe basis averaged $5.35 per Boe for year to date 2026 compared to $5.06 per Boe for year to date 2025.

Production and Ad Valorem Taxes. Production and ad valorem taxes increased $51.6 million, or 13%, to $440.6 million for year to date 2026 compared to $389.0 million for year to date 2025 due to an increase in crude oil and natural gas revenues. Our production taxes as a percentage of net sales averaged 7.4% for year to date 2026 compared to 7.6% for year to date 2025, the decrease of which resulted from changes in sales mix of crude oil and natural gas in our operating areas between periods.

Transportation, gathering, processing, and compression. These charges totaled $242.9 million for year to date 2026, consistent with $242.7 million for year to date 2025.

Depreciation, Depletion, Amortization and Accretion. DD&A totaled $1.96 billion for year to date 2026, consistent with $1.94 billion for year to date 2025. The following table shows the components of our DD&A on a unit of sales basis for the periods presented.

General and Administrative Expenses. Total G&A expenses increased $140.9 million to $328.0 million for year to date 2026 compared to $187.1 million for year to date 2025. Such expenses include charges for incentive compensation awards of $96.5 million and $54.9 million for the year to date periods of 2026 and 2025, respectively, the increase of which was driven by an upward remeasurement of outstanding award liabilities resulting from an increase in the value of the Company between periods. G&A expenses other than incentive compensation awards totaled $231.5 million for year to date 2026 compared to $132.2 million for year to date 2025. This increase was driven by the nonrecurring legal settlement costs described in Notes to Unaudited Condensed Consolidated Financial Statements-Note 8. Commitments and Contingencies, an annual increase in employee-related costs and

benefits, higher transaction costs including our expansion into international jurisdictions, software enhancements, and lower overhead and cost recoveries from joint interest owners due to a decrease in drilling and completion spending compared to the prior period. The following table shows the components of G&A expenses on a unit of sales basis for the periods presented. The per-unit G&A rate recognized for year to date 2026 is not expected to continue and future periods are expected to be more in line with our historical averages.

Income Taxes. For the nine months ended September 30, 2026 and 2025 we provided for income taxes on our domestic pre-tax income at a combined federal and state tax rate of 23.5%. We recorded income tax provisions of $161.9 million and $470.0 million for the year to date periods of 2026 and 2025, respectively, which resulted in effective tax rates of 18.7% and 22.4%, respectively, after taking into account the application of statutory tax rates, permanent taxable differences, estimated tax credits, and other items. The decrease in our effective tax rate for year to date 2026 was due in part to various discrete income tax benefits totaling $14.9 million recognized in the third quarter upon the filing of our 2025 federal income tax return.

Liquidity and Capital Resources

Our primary sources of liquidity have historically been cash flows generated from operating activities, financing provided by our credit facility, and the issuance of debt securities. Additionally, asset dispositions and joint development arrangements have provided a source of cash flow for use in reducing debt and enhancing liquidity.

At September 30, 2026, we had $1.8 billion of borrowing availability with no outstanding borrowings under our credit facility, along with $415.9 million of cash on hand. Our credit facility, which is unsecured and has no borrowing base subject to redetermination, does not mature until October 2029. We have the option to extend the October 2029 maturity date by up to two additional one-year periods subject to lender consent.

The Company anticipates using its current cash reserves coupled with credit facility borrowings to repay its $800 million of senior notes maturing on November 15, 2026.

Based on our planned capital spending, our forecasted cash flows and projected levels of indebtedness, we expect to maintain compliance with the covenants under our credit facility and senior note indentures. Further, based on current market indications, we expect to meet our contractual cash commitments to third parties as of September 30, 2026, including those subsequently described under the heading Future Capital Requirements, recognizing we may be required to meet such commitments even if our business plan assumptions were to change. We monitor our capital spending closely based on actual and projected cash flows and have the ability to reduce spending or dispose of assets if needed to preserve liquidity and financial flexibility to fund our operations.

Cash Flows

Cash flows from operating activities

Net cash provided by operating activities decreased $52 million, or 1%, to $3.63 billion for year to date 2026 compared to $3.68 billion for year to date 2025. This change resulted from an $849 million increase in crude oil, natural gas, and NGL revenues and a $189 million decrease in cash payments for income taxes, fully offset by reductions in cash flows from an $812 million increase in realized cash losses on matured commodity derivatives and the previously described increases in operating expenses.

Cash flows from investing activities

Net cash used in investing activities totaled $4.57 billion for year to date 2026 compared to $2.56 billion for year to date 2025. Our investing cash flows for year to date 2026 include $2.84 billion of acquisitions as discussed in Notes to Unaudited Condensed Consolidated Financial Statements-Note 11. Property Acquisitions. We had no significant acquisitions for year to date 2025. For full year 2026 our capital expenditures budget excluding acquisitions is approximately $2.8 billion compared to $3.1 billion of non-acquisition capital spending in full year 2025.

Cash flows from financing activities

Net cash used in financing activities for year to date 2026 totaled $18.2 million representing net distributions to noncontrolling interests. Net cash used in financing activities for year to date 2025 totaled $52.3 million primarily consisting of $35.2 million of net repayments on outstanding debt and $16.3 million of net distributions to noncontrolling interests.

Future Sources of Financing

Although we cannot provide any assurance, we believe funds from operating cash flows, our cash balance, and availability under our credit facility should be sufficient to meet our normal operating needs, debt service obligations, budgeted capital expenditures, and cash payments for income taxes for at least the next 12 months and to meet our contractual cash commitments to third parties described under the heading Future Capital Requirements beyond 12 months.

Based on current market indications, our budgeted capital spending plans over the next 12 months are expected to be funded from operating cash flows. Any deficiencies in operating cash flows relative to budgeted spending are expected to be funded by our cash balance and borrowings under our credit facility. If cash flows are materially impacted by declines in commodity prices or an increase in costs, we have the ability to reduce our capital expenditures or utilize the availability of our credit facility if needed to fund our operations.

We may choose to access banking or debt capital markets for additional financing or capital to fund our operations or take advantage of business opportunities that may arise. Further, we may sell assets or enter into strategic joint development opportunities in order to obtain funding if such transactions can be executed on satisfactory terms. However, no assurance can be given that such transactions will occur.

Credit facility

We have an unsecured credit facility, maturing in October 2029, with aggregate lender commitments totaling $1.8 billion. We have the option to extend the October 2029 maturity date by up to two additional one-year periods subject to lender consent. The commitments are from a syndicate of 14 banks and financial institutions. We believe each member of the current syndicate has the capability to fund its commitment.

The commitments under our credit facility are not dependent on a borrowing base calculation subject to periodic redetermination based on changes in commodity prices and proved reserves. Additionally, downgrades or other negative rating actions with respect to our credit rating do not trigger a reduction in our current credit facility commitments, nor do such actions trigger a security requirement or change in covenants.

Our credit facility contains restrictive covenants that may limit our ability to, among other things, incur additional indebtedness, incur liens, engage in sale and leaseback transactions, or merge, consolidate or sell all or substantially all of our assets. Our credit facility also contains a requirement that we maintain a consolidated net debt to total capitalization ratio of no greater than 0.65 to 1.00. See Notes to Unaudited Condensed Consolidated Financial Statements-Note 7. Debt for a discussion of how this ratio is calculated pursuant to our credit agreement.

We were in compliance with our credit facility covenants at September 30, 2026 and expect to maintain compliance. At September 30, 2026, our consolidated net debt to total capitalization ratio was 0.22. We do not believe the credit facility covenants are reasonably likely to limit our ability to undertake additional debt financing if needed to support our business.

Future Capital Requirements

Our material future cash requirements are summarized below. Based on current market indications, we expect to meet our contractual cash commitments to third parties as of September 30, 2026, recognizing we may be required to meet such commitments even if our business plan assumptions were to change.

Senior notes

Our debt includes outstanding senior note obligations totaling $4.8 billion at September 30, 2026, exclusive of interest payment obligations thereon. Our senior notes are not subject to any mandatory redemption or sinking fund requirements. Our $800 million of 2026 Notes mature on November 15, 2026. We expect to fully redeem our 2026 Notes by the maturity date using a combination of available cash on hand and credit facility borrowing capacity. For further information on the face values, maturity dates, semi-annual interest payment dates, optional redemption periods and covenant restrictions related to our senior notes, refer to Note 7. Debt in Notes to Unaudited Condensed Consolidated Financial Statements.

We were in compliance with our senior note covenants at September 30, 2026 and expect to maintain compliance. We do not believe the senior note covenants will materially limit our ability to undertake additional debt financing. Downgrades or other negative rating actions with respect to the credit ratings assigned to our senior unsecured debt do not trigger additional senior note covenants.

Credit facility borrowings

As of October 30, 2026 we continued to have no outstanding borrowings on our credit facility. However, we do expect to incur temporary credit facility borrowings to fund a portion of the redemption of our 2026 Notes on November 15, 2026.

Transportation, gathering, and processing commitments

We have entered into transportation, gathering, and processing commitments to guarantee capacity on crude oil and natural gas pipelines and natural gas processing facilities that require us to pay per-unit charges regardless of the amount of capacity used. Future commitments remaining as of September 30, 2026 under the arrangements amount to approximately $1.3 billion. See Note 8. Commitments and Contingencies in Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

Capital expenditures

For 2026, our capital expenditures excluding acquisitions are forecasted to be approximately $2.8 billion. For the nine months ended September 30, 2026, we invested $1.88 billion in our capital program excluding $2.84 billion of unbudgeted acquisitions that are further discussed in Notes to Unaudited Condensed Consolidated Financial Statements-Note 11. Property Acquisitions.

Our drilling and completion activities and the actual amount and timing of our capital expenditures may differ materially from our budget as a result of, among other things, available cash flows, unbudgeted acquisitions, actual drilling and completion results, operational process improvements, the availability of drilling and completion rigs and other services and equipment, cost inflation, the impact of tariffs or trade restrictions, the availability of transportation, gathering and processing capacity, changes in commodity prices, and regulatory, technological and competitive developments. We monitor our capital spending closely based on actual and projected cash flows and may adjust our spending should commodity prices materially change from current levels. We expect to continue participating as a buyer of properties when and if we have the ability to increase our position in strategic plays at attractive terms.

Stock redemption agreement

See Note 8. Commitments and Contingencies-Stock Redemption Agreement in Notes to Unaudited Condensed Consolidated Financial Statements.

Equity investment

See Note 10. Equity Investment in Notes to Unaudited Condensed Consolidated Financial Statements for discussion of a power plant joint venture entered into by the Company in March 2026 and related promissory note, capital commitments, and guarantees associated with the venture.

International Opportunities

In August 2026, Continental signed a non-binding Heads of Agreement ("HOA") outlining a proposed transaction under which Continental would acquire a 50% interest in Phoenix Global Resources, a portfolio company of Mercuria Energy Group, contribute its operated interest in the Los Toldos II Oeste block, and form a 50/50 joint venture focused on the continued development and expansion of the venture's combined oil and gas assets in Argentina's Vaca Muerta shale play. If the transaction is consummated, Continental's 50% net share of the venture's potential capital deployment could total more than $2 billion over the next five years, subject to final determination of capital plans. It is anticipated the venture will fund its capital needs using internally generated cash flows and third party debt financing that is expected to be non-recourse to Continental. The HOA reflects the parties' current intentions regarding the proposed transaction. Completion of the transaction is subject to the negotiation and execution of definitive agreements, satisfaction of applicable closing conditions, and receipt of any required regulatory approvals.

In September 2026, Continental signed a non-binding Memorandum of Understanding with Petróleos de Venezuela, S.A. to operate and develop the Ayacucho 2 Block in Venezuela's Orinoco Oil Belt. The parties are in the process of negotiating definitive documents outlining the terms and conditions that would apply to Continental's operation of the block.

No assurance can be given that the transactions noted above will occur. We plan to continue evaluating additional opportunities in Argentina, Venezuela, the United States, and elsewhere.

Derivative Instruments

The fair value of our crude oil and natural gas derivative instruments at September 30, 2026 was a net liability of $578.3 million. See Note 5. Derivative Instruments in Notes to Unaudited Condensed Consolidated Financial Statements for further discussion of our hedging activities, including a summary of derivative contracts in place as of September 30, 2026. The estimated fair value of our derivatives is highly sensitive to market price volatility and therefore subject to significant fluctuations from period to period. See Part I, Item 3. Quantitative and Qualitative Disclosures About Market Risk for information on how hypothetical changes in commodity prices would impact the fair value of our crude oil and natural gas derivatives as of September 30, 2026.

Critical Accounting Policies and Estimates

There have been no changes in our critical accounting policies and estimates from those disclosed in our 2025 Form 10-K.

Inflation

Inflationary pressures experienced in recent years may persist or worsen. Some of the underlying factors impacting inflation may include, but are not limited to, geopolitical events and military actions affecting crude oil-producing nations that impact the global supply of crude oil, global supply chain disruptions, the imposition of trade restrictions or other governmental actions related to tariffs or trade policies, shipping bottlenecks, labor market constraints, increased competition for goods and services, and side effects from monetary and fiscal policies. It is uncertain at this time to what extent changes in trade restrictions and tariffs will have on our business. Tariffs on foreign goods and services could result in reciprocal tariffs on U.S. goods and services, which could impact the demand for and price of crude oil, natural gas, and natural gas liquids and increase inflationary pressures on, or impact the availability of, certain supplies, equipment and materials that we use to conduct our business. If inflationary pressures persist or worsen, we may incur additional costs for equipment and materials and from service providers. Our budgeted expenditures include an estimate for the potential impact of cost inflation and increased costs resulting from tariffs and, despite inflationary pressures, we expect to continue generating significant amounts of free cash flow at current commodity price levels.