OKLAHOMA CITY, Dec. 20, 2012 /PRNewswire/ -- Continental Resources, Inc. (CLR) has completed the acquisition of 119,218 net acres in the Bakken field, primarily in Williams and Divide counties, North Dakota, from Samson Resources Company for $649.3 million in cash, subject to post-close adjustments. The acquisition includes production of approximately 6,500 barrels of oil equivalent per day (Boepd), of which 82 percent is crude oil.
In addition, Continental completed the sale of properties and approximately 1,100 Boepd of production in its Eastern Region for $125 million in cash, subject to post-close adjustments.
Combined, the transactions are expected to reduce 2013 production operating costs per barrel of oil equivalent (Boe), compared with previous guidance, and increase production growth to a range of 35-to-40 percent. The Bakken transaction increases Continental's leasehold to 1.1 million net acres, further strengthening its position as the No. 1 acreage holder and producer in what the Company believes will prove to be the largest oil field in the nation.
"We bought the Bakken acreage to develop it and expand it," said Harold Hamm, Chairman and Chief Executive Officer. "This is consistent with our continued concentration of investment in high rate-of-return projects. Together the transactions add 20 net Bakken wells to our 2013 drilling program, in addition to other well completion activities, and eliminate 11 Eastern Region wells."
The acquisition includes 45,167 net acres (77 percent held by production) located along the Nesson Anticline in a jointly developed area of mutual interest (AMI) between Continental, as operator, and Samson. As a result of the acquisition, Continental's average working interest in the AMI acreage increased to 71 percent, compared with the previous working interest of 46 percent.
The balance of the acquired net acreage (74,051 net acres) is primarily located immediately west of the AMI acreage and is 40 percent held by production. Subsequent to the acquisition, Continental has an average working interest of 34 percent in the non-AMI area, but it will operate a majority of this acreage, due to the distribution of its ownership.
CLR getting bigger
CLR getting bigger
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: CLR getting bigger
Continental believes the entire acquisition area of 119,218 net acres has potential for deeper Three Forks development, based on three strategically placed cores taken in 2011.
"This is a classic bolt-on acquisition, from a number of perspectives – strategic, tactical and financial," said Rick Bott, President and Chief Operating Officer. "It fits nicely into our deeper bench Three Forks de-risking plan, and we expect it to add immediate value. Within the next 30 days we plan to spud the first of 10 wells in the northern region, targeting the deeper benches to confirm commercial production and appraise our down-spacing concept, so we can quickly leverage operational efficiencies with pad drilling."
Note that this deal increases production guidance for 2013, above what I currently have in my forecast model. - Dan
"This is a classic bolt-on acquisition, from a number of perspectives – strategic, tactical and financial," said Rick Bott, President and Chief Operating Officer. "It fits nicely into our deeper bench Three Forks de-risking plan, and we expect it to add immediate value. Within the next 30 days we plan to spud the first of 10 wells in the northern region, targeting the deeper benches to confirm commercial production and appraise our down-spacing concept, so we can quickly leverage operational efficiencies with pad drilling."
Note that this deal increases production guidance for 2013, above what I currently have in my forecast model. - Dan
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group