Continental Resources refines focus on oil

Continental has struck a $650 million deal to acquire an additional 120,000 acres in two North Dakota counties from an unnamed seller.

The acreage includes undeveloped leasehold and wells producing about 6,500 barrels of oil equivalent a day.

Continental already is the largest leaseholder in the Bakken with more than 984,000 net acres.

The Oklahoma City-based oil company also has signed an agreement to sell producing oil and natural gas properties and supporting assets from its east region.

An unidentified buyer will pay $125 million for properties producing about 1,100 barrels of oil equivalent a day.

Most of Continental's eastern holdings are east of the Mississippi River, including acreage in Michigan and the Illinois Basin.

“We are divesting noncore, conventional assets and reinvesting the proceeds in an attractive acquisition that further builds our strategic, core position in the Bakken,” CEO Harold Hamm said. “Continental operates a large portion of the acreage that we are acquiring, and more than half of it is held by production.”

The deals are expected to be completed by the end of the year.

Continental expects increased cash flow from the new Bakken acreage to offset its additional drilling costs in 2013, if the deal is completed as planned.