(Adds analyst comments, updates share movement)
By Hezron Selvi
July 29 (Reuters) - Oil and gas explorer Continental Resources Inc (CLR.N) reported better-than-expected quarterly earnings, helped by oil and gas prices that have almost doubled in the last year and higher production, but announced the retirement of its chief operating officer.
Shares of the company were down more than 15 percent in morning trade on the New York Stock Exchange.
"Oil is down nearly $2 this morning and the entire E&P index is getting crushed and a stock like CLR with a limited float for its size, the downside move is magnified," Raymond James analyst John Freeman said in an e-mailed response.
U.S. crude CLc1 fell more than $4 a barrel to below $121 on Tuesday, touching the lowest price since May, as signs of weakening demand outweighed a disruption to Nigerian oil output.
Second-quarter net income was $127.3 million, or 75 cents a share, compared with a net loss of $142.5 million, or 87 cents a share, in the year-ago quarter. Excluding stock-based compensation charges, it had earned 27 cents a share, a year earlier.
Total revenue doubled to $303.4 million.
Analysts on average were expecting earnings of 71 cents a share, on revenue of $286.8 million, according to Reuters Estimates.
Average daily production was up 10.5 percent to 31,623 barrels of oil equivalent per day (boepd).
However, the company said second-quarter production in its Red Rivers unit, which contributes more than 40 percent to the total production, was hurt by a storm that struck South Dakota in the first week of May. The storm cut electrical power to significant parts of the units for most of May, the company said.
Continental also said that the need for additional sources of water is expected to move its previously announced peak production target for the Units of 21,000 net boepd to late 2009.
Analyst Curtis Trimble of Natixis Bleichroeder said the production shortfall, compared to his estimates, was almost entirely offset by higher-than-expected realized commodity prices.
The average price at which the company sold a barrel of crude oil during the quarter was $102.86, compared with $54.44 in the same quarter last year.
The Enid, Oklahoma-based company said its Chief Operating Officer Mark Monroe will retire effective Oct. 31, and Senior Vice President of Operations Jeff Hume will be promoted to the position.
Analyst Trimble speculated that some investors may have invested in CLR shares with expectations that Mark Monroe might facilitate a merger or acquisition of Continental in a fashion similar to that of Louis Dreyfus Gas where he was previously employed.
Mark Monroe was the Chief Executive of Louis Dreyfus Natural Gas Corp prior to its merger with Dominion Resources Inc. in 2001.
Dominion Resources (D.N) had acquired Louis Dreyfus Natural Gas for $2.3 billion in cash, stock and assumed debt.
Shares of Continental Resources were trading down 13.68 percent at $55.00 in late morning trade, compared with the broader Dow Jones U.S. Exploration & Production Index .DJUSOS which was down 2.54 percent at 677.47. (Reporting by Hezron Selvi in Bangalore; Editing by Amitha Rajan, Jarshad Kakkrakandy)