Continental Resources schedules special meeting
Continental Resources on Monday announced plans for a special shareholders meeting for Aug. 10 to consider its planned purchase of Wheatland Oil, which is owned by two Continental executives.
Continental Resources will hold a special shareholders meeting Aug. 10 to consider its planned $340 million purchase of a company owned by two Continental executives, the Oklahoma City-based oil company said in a regulatory filling Monday.
Enid-based Wheatland Oil Inc. holds a 5 percent to 10 percent interest in Continental's leasehold in parts of the Bakken field of North Dakota and Montana as well as other Continental assets in Mississippi and Oklahoma. Continental CEO Harold Hamm owns 75 percent of Wheatland, and Jeff Hume, Continental's vice chairman of strategic growth initiatives, controls the remaining 25 percent.
Continental announced the sale in March, but provided more details in Monday's proxy filing.
The Louisiana Municipal Police Employees' Retirement System last month sued to block the sale, calling the purchase price excessive and calling the deal tainted by conflicts of interest.
In the proxy statement, Continental said it plans to close the sale by Aug. 15 and that one of the conditions of closing the sale is that there would be no “suit, action or other proceedings by a third party” seeking to block the sale.
Attorneys for the Louisiana pension fund did not return phone calls Monday to The Oklahoman, and a Continental spokeswoman declined to comment because of the pending proxy vote.
Analyst Andrew Coleman said the transaction looks clean.
“I thought it was very transparent,” said Coleman, an analyst with Raymond James & Associates in Houston. “They're buying an extra 5 percent in substantially the same fields they already work in. They're looking at the same wells and the same data. They added in the new barrels at the same price and know what they will get paid. I thought it was one of the more elegant solutions out there because you could arrive at a number very easily and tie it cleanly to the price disclosed.”
Wheatland's holdings include acreage in North Dakota and Montana and interests in more than 1,000 wells with production of more than 2,500 barrels of oil equivalent a day in December.
The Enid company was formed in 1987, but it acquired most of its Bakken assets as part of a 10-year participation agreement that began in January 2002.
Continental said it began the participation agreement because at the time Continental was not public and had limited access to capital and because the Bakken plays were unproven and undeveloped.
“Wheatland became an investor to share the risks of developing these Bakken plays,” the proxy stated.
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