Continental Buys Bakken Assets

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
649MM
Description

Purchase of producing and non-producing assets in Bakken, including 120,000 net acres producing 6,500 BOE per day.

Continental Resources Inc. (NYSE: CLR) plans to buy producing and undeveloped acreage in the Bakken from an undisclosed seller for $650 million.

The property includes leasehold of about 120,000 net acres, primarily in Divide and Williams counties, North Dakota, and production of about 6,500 barrels of oil equivalent (BOE) per day.

Continental is currently the largest leaseholder in the Bakken, with 984,040 net acres as of Sept. 30. Once this transaction closes, the leasehold acreage will increase to 1.1 million net acres.

In addition, Continental announced it plans to sell its producing crude oil and natural gas properties and supporting assets in its East Region for $125 million in cash. The East Region primarily includes properties east of the Mississippi River, including the Illinois Basin and the state of Michigan, among other areas. Production from the properties included in the sale agreement averaged approximately 1,100 BOE per day for the three-month period ended Sept. 30.

"We are divesting non-core, conventional assets and re-investing the proceeds in an attractive acquisition that further builds our strategic, core position in the Bakken," said Harold Hamm, Continental chairman and chief executive. "Continental operates a large portion of the acreage that we are acquiring, and more than half of it is held by production."

If the Bakken acreage acquisition is completed as planned, Continental expects additional 2013 drilling capital expenditures will be largely offset by incremental cash flow from the properties.Both transactions are expected to close prior to Dec. 31.

Continental Resources, based in Oklahoma City, Okla, is one of the top 10 petroleum liquids producer in the United States. In October 2012, it announced a new five-year plan to triple production and proved reserves by year-end 2017. It plans to invest in the Bakken of North Dakota and Montana and in Northwest Cana plays of Oklahoma.