What’s the number one oil producer in the most prolific tight oil field in the U.S. up to these days? Well, Continental was already the largest leaseholder in the Bakken and now with a recent acquisition to purchase 120,000 more net acres, the company has strengthened its leasehold to approximately 1.1 million net acres. The deal, purchased from an undisclosed seller, is valued at $650 million and along with acreage also includes current production from the property at about 6,500 boe/d. Continental plans to finance a portion of the acquisition by selling off non-core assets in Michigan, the Illinois Basin, and other areas not mentioned east of the Mississippi River for $125 million. Production from those properties being sold averaged roughly 1,100 boe/d in the second quarter of 2012. Both of these transactions are expected to close by year-end. In respect to this, the company does have a decent portion of acreage expiring next year. Upon closing of the acquired Bakken asset deal it might be interesting to see if Continental renews any of the expiring acreage outside of their core areas.
Continental has clearly established themselves as the top operator in the play. According to a recent investor presentation, the company contributes to roughly 10% of the rigs, 10% of leased acreage, and 13% of total production out of the Bakken. Below is a chart with data pulled from DI Desktop just showing daily peak liquids production.
Continental currently has 19 operated rigs, down from 26 in the first half of this year. Target EURs are about 603 Mboe for a 10,000 foot lateral and 30 frac stages. Single well completed well costs average roughly $9.2 million and $8.5 million for ECO-pad wells. For more information on single-well economics and other operator metrics visit the Bakken folder in Drillinginfo under the DNA heading.
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