Continental Resources Inc. on Thursday boosted its stake in the oil-rich Bakken field in North Dakota and Montana in a $649 million deal the Oklahoma City energy company said will increase production and reduce costs.
Also on Thursday, Continental sold most of its holdings in the Michigan and Illinois basins for $125 million.
Continental bought more than 119,000 net acres from Tulsa-based Samson Resources Co. in a deal that includes about 6,500 barrels of oil equivalent per day, 82 percent of which is crude oil. The acquisition boosts Continental's Bakken holdings by 8.5 percent to about 1.1 million net acres.
“We bought the Bakken acreage to develop it and expand it,” Continental CEO Harold Hamm said. “This is consistent with our continued concentration of investment in high rate-of-return projects.”
The purchased acreage is concentrated in two areas. About 45,000 acres is in an area Continental and Samson were developing together. Thursday's deal increases Continental's average stake in the area to 71 percent, up from 46 percent.
In the other 74,000 acres, the deal boosts Continental's stake to an average of 34 percent, up from 11 percent. Continental will become the operator in a majority of that acreage.
“The ability to have operating control is extremely important to our strategy because we're so efficient because of well costs,” said Warren Henry, Continental's vice president of investor relations.