EXHIBIT 12.1 - COMPUTATION OF RATIO OF DEBT TO EBITDA
CONTINENTAL RESOURCES, INC.
PRO FORMA PRO FORMA
YEAR ENDED THREE MONTHS THREE MONTHS
YEAR ENDED DECEMBER 31, DECEMBER 31 ENDED MARCH 31, ENDED MARCH 31
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1993 1994 1995 1996 1997 1997 1997 1998 1998
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NET INCOME 5,772 2,875 3,869 13,325 26,197 20,007 4,114 1,715 (82)
INCOME TAXES 2,974 1,596 2,252 8,238 (8,941) (8,941) 2,521 0 0
INTEREST EXPENSE 314 670 2,396 4,550 4,804 15,684 1,117 2,005 3,919
AMORTIZATION OF OFFERING COSTS 460 115
DD&A 4,816 6,068 9,614 22,876 33,354 34,931 8,844 5,408 5,797
EXPLORATION EXPENSE 1,996 6,338 6,184 4,513 6,807 6,806 973 1,548 1,548
LITIGATION SETTLEMENT (4,000) (7,500) (7,500)
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EBITDA(1) 11,872 17,547 24,315 53,502 54,721 61,447 17,569 10,676 11,297
TOTAL DEBT 7,514 6,272 44,265 54,759 79,632 153,957
TOTAL DEBT TO EBITDA 0.6 0.4 1.8 1 1.5 2.5 N/A N/A N/A
(1) EBITDA represents earnings before interest expense, income taxes,
depreciation, depletion, amortization and exploration expense, excluding
proceeds from the litigation settlements. EBITDA is not a measure of cash
flow as determined by generally accepted accounting principles ("GAAP").
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 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 EBITDA. The Company's computations of EBITDA
may not be comparable to other similarly titled measures of other companies.
The Company believes that 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.