Continental Resources Makes $1B in M&A Moves—But Where?

More than year after leaving the public markets, Continental Resources’ corporate private life appears to be active, including $1 billion in M&A.

The Greta Garbo of E&Ps Continental is not. Despite being private, the company detailed its production and earnings, although it has no obligation to do so.

Oklahoma City-based Continental’s Feb. 22 annual report details some of its behind-the-scenes deals, as well as production results for the Bakken and Permian, Anadarko and Powder River basins.

On the deal front, Continental gave firm financial numbers about its transactional values—but not the locations of the deals. Where precisely the company bought—and sold—may by a mystery, but some inferences can be made.

For full-year 2023, Continental executed on $681 million in acquisitions, with $161 million allocated for proved properties and $520 million for unproved. It disposed of another $390 million in assets.

In March 2023, Continental disclosed in Securities and Exchange Commission (SEC) filings that the company acquired oil and gas properties in Oklahoma’s Anadarko for a cash consideration of $178 million. Of the purchase price, $84 million was allocated to proved properties and $94 million went to unproved properties.

That leaves about $500 million remaining for acquisitions it made the rest of the year—a half billion that likely went to the Bakken and Permian.

A comparison of Continental’s acreage to end 2023 compared to 2022 gives an “as the spreadsheet flies” estimate of what the company added—not including acreage swaps or other non-momentary transactions.

Continental’s Anadarko acreage increased the most year-over-year, by 6%, to 502,421 net acres. Continental leasehold also increased in the expensive Bakken (6,316 net acres) and the ultra-pricey Permian (5,527 acres).

The company’s only core play to shrink its footprint—albeit by a negligible 1,773 acres—was the Powder River Basin. Continental also subtracted another 43,516 net acres from its “other” pile of oil and gas properties.

Overall, 2023 oil and gas property divestitures of $390 million resulted in a pre-tax net loss of $51 million.

“The disposed properties represented an immaterial portion of the company's production and proved reserves,” Continental told the SEC.

Continental posted about $3 billion in income for the year, down from $4 billion in 2024.

The Permian and Bakken led growth for Continental’s total production, offsetting slight 3% to 5% declines in the Anadarko, Powder River and “other” assets.

Total Bakken production averaged 220,428 boe/d day for fourth-quarter 2023, up 26% from fourth-quarter 2022. For the year, average daily Bakken production increased 18% compared to 2022.

“In 2023, we participated in the drilling and completion of 363 gross (166 net) wells in the Bakken compared to 266 gross (93 net) wells in 2022,” Continental said in regulatory filings.

The company’s inventory of proved undeveloped drilling locations in the Bakken totaled 539 net wells at years end.

Continental’s Permian assets represent 21% of the company’s total proved reserves at the end of 2023—and 13% of its average production for the quarter. The Permian pumped out 58,601 boe/d in the final quarter of 2023, a 30% increase over fourth-quarter 2022. Continental drilled and completed 66 net wells in the play compared to 35 in 2022.

“Our proved reserves in the Permian Basin totaled 386 MMBoe as of Dec. 31, 2023, an increase of 27% compared to Dec. 31, 2022,” the company said in SEC filings. “Our inventory of proved undeveloped drilling locations in the play totaled 459 gross (377 net) wells at year-end 2023.”

In the Anadarko, production averaged 144,158 boe/d in the fourth quarter, down 13% compared to the fourth-quarter 2022. The company drilled and completed 43 net wells in the basin.

Production in the Powder River Basin averaged 25,577 boe/d in fourth-quarter 2023, a 9% decrease year-over-year.