Continental Resources, Inc.
) has inked a pact worth $650 million to acquire various
producing and undeveloped Bakken assets.
CONTL RESOURCES (CLR): Free Stock Analysis
EOG RES INC (EOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
The assets consist of a net acreage of around 120,000 - leases
mainly in the Divide and Williams counties, North Dakota, as well
as a yield of around 6,500 barrels of oil equivalent per day
As of September 30, 2012, Continental remains the leading
leaseholder in the Bakken, with a net acreage of about 984,000.
With the completion of its current purchase in the Bakken, the
total holding of the company will increase to 1.1 million net
Further, Continental has also announced a sale for its producing
crude oil and natural gas assets as well as supporting assets in
its East Region for a total value of $125 million.
The assets in the East Region are mainly located east of the
Mississippi River, together with the Illinois Basin and the state
of Michigan, among other areas. For the quarter ended September
30, 2012, output from the properties - forming a part of the sale
agreement - averaged approximately 1,100 Boe/d.
Both these deals are likely to be closed before December 31,
2012. However, these are subject to customary closing conditions
Continental's ongoing negotiations are in line with its strategy
that sees the company dispensing with its mature, non-core
upstream assets to create a portfolio with stronger growth
potential in the Bakken. The company intends to use the proceeds
to purchase strategic and core assets in the Bakken.
Continental believes that if the Bakken acreage acquisition is
completed on time, the additional 2013 drilling expenses will be
largely mitigated by the incremental cash flow from the assets.
Continental holds a Zacks #2 Rank, which is equivalent to a Buy
rating for a period of one to three months. The company's peer
EOG Resources Inc.