CONTINENTAL RESOURCES, INC. Exhibit 12.1 - COMPUTATION OF RATIO OF DEBT TO ADJUSTED EBITDA Three months ended YEAR ENDED DECEMBER 31, March 31, -------------------------------------------------------- --------- 1999 2000 2001 2002 2003 2004 -------- ---------- ---------- ---------- ---------- --------- NET INCOME (LOSS) 3,920 37,780 11,667 (20,032) 2,340 992 INCOME TAXES - - - - - - INTEREST EXPENSE 17,370 16,514 15,674 18,401 20,258 5,289 DD&A 19,549 19,552 27,731 31,380 42,367 11,632 ACCRETION EXPENSE - - - - 1,151 277 PROPERTY IMPAIRMENTS 5,154 5,631 10,113 25,686 8,975 1,897 EXPLORATION EXPENSE 3,191 9,965 15,863 10,229 17,221 2,092 LITIGATION SETTLEMENT - - - - - - CHANGE IN ACCOUNTING PRINCIPLE - - - - (2,162) - -------- ---------- ---------- ---------- ---------- --------- ADJUSTED EBITDA <F1> 49,184 89,442 81,048 65,664 90,150 22,179 ANNUALIZED ADJUSTED EBITDA 88,716 TOTAL DEBT <F2> 170,637 140,350 183,395 235,205 277,093 283,982 TOTAL DEBT TO ADJUSTED EBITDA 3.5 1.6 2.3 3.6 3.1 3.2 <FN> <F1> Adjusted EBITDA represents earnings before interest expense, income taxes, depreciation, depletion, amortization, accretion, property impairments 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' ability to meet future debt service requirements, if any. <F2> Total debt excludes capital leases of $13.0 million in the three months ended March 31, 2004, $13.8 million in 2003 and $12.0 million in 2002. </FN>