Exhibit 12.1
COMPUTATION OF DEBT TO ADJUSTED EBITDA
CONTINENTAL RESOURCES, INC.
YEAR ENDED DECEMBER 31,
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1996 1997 1998 1999 2000
---- ---- ---- ---- ----
NET INCOME 13,325 26,197 (17,980) 3,920 37,780
INCOME TAXES 8,238 (8,941) -- -- --
INTEREST EXPENSE 4,550 4,804 12,248 16,534 15,786
DD&A 22,876 33,354 38,716 20,385 21,945
EXPLORATION EXPENSE 4,513 6,807 7,106 7,750 13,321
LITIGATION SETTLEMENT -- (7,500) -- -- --
-------- -------- -------- -------- --------
ADJUSTED EBITDA <F1> 53,502 54,721 40,090 48,589 88,832
TOTAL DEBT 54,759 79,632 167,639 170,637 140,350
TOTAL DEBT TO ADJUSTED EBITDA 1.0 1.5 4.2 3.5 1.6
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<FN>
<F1> Adjusted EBITDA represents earnings before interest expense, income taxes,
depreciation, depletion, amortization and exploration expense, excluding
proceeds from litigation settlements. Adjusted EBITDA is not a measure of
cash flow as determined by generally accepted accounting principles
("GAAP"). Adjusted EBITDA should not be considered as an alternative to, or
more meaningful than, net income or cash flow as determined in accordance
with GAAP or as an indicator of a company's operating performance or
liquidity. Certain items excluded from Adjusted EBITDA are significant
components in understanding and assessing a company's financial
performance, such as a company's cost of capital and tax structure, as well
as historic costs of depreciable assets, none of which are components of
Adjusted EBITDA. The Company's computations of Adjusted EBITDA may not be
comparable to other similarly titled measures of other companies. The
Company believes that Adjusted EBITDA is a widely followed measure of
operating performance and may also be used by investors to measure the
Company's ability to meet future debt service requirements, if any.
</FN>