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Continental Resources boosts Bakken stake

Continental Resources increased its stake in the Bakken in North Dakota and Montana by 8.6 percent in a $649 million deal the company said will increase production and reduce costs. The company also sold its assets in Illinois for $125 million.
by Adam Wilmoth Modified: December 20, 2012 at 10:33 pm •  Published: December 21, 2012
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The average Continental-operated Bakken well costs about $9 million, Henry said, while the wells the company participates in but does not operate typically cost $11 million to $13 million.

“We obviously want to operate as much as we can,” Henry said.

Henry attributed the savings in part to Continental's ability as the largest operator in the area to benefit from bulk rates for rigs, sand and other products. Continental also said it expects a cost savings from selling its less efficient and more expensive eastern properties.

The two transactions are expected to cut Continental's production expense to between $5.20 and $5.60 per barrel of oil equivalent, down from its previous guidance of $5.50 to $5.90 per equivalent barrel.

Continental also said the deal will boost its year-over-year production growth to 35 percent to 40 percent, up from 30 percent to 35 percent.

“I think this is a positive for them,” said Gail Nicholson, senior research analyst at KLR Group in Tampa, Fla. “This is a nice bolt-on acquisition for the company.”

Continental shares gained 45 cents, or 0.6 percent, to close at $75.39 Thursday.

by Adam Wilmoth
Energy Editor
Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector....
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