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Continental Resources Inc. (NYSE: CLR) agreed Aug. 3 to sell 29,500 net acres in Oklahoma’s Scoop Play with the proceeds to pay down debt.
Continental said an undisclosed buyer will purchase “non-strategic leasehold” located primarily on the eastern side of the Scoop for $281 million.
The leasehold produces about 550 barrels of oil equivalent per day (boe/d). After the transaction closes, Continental will retain about 384,000 net acres in the Scoop, where the company has long been a dominant player.
Jack Stark, Continental president and COO, said the Scoop sale and a previous deal in Wyoming will total nearly $400 million.
In May, Continental said it would sell about 132,000 net acres of leasehold in the Washakie Basin for $110 million.
"We have additional opportunities to sell non-strategic assets for continued debt reduction," Stark said.
In its second-quarter earnings report, Continental also said it increased its Stack leasehold by about 12,000 net acres, giving it a 183,000 net acre position located primarily in Blaine, Dewey and Custer counties, Okla.
Since the end of 2015, the company has added about 27,000 net acres of leasehold in the Stack.
As of June 30, Continental had $16.6 million in cash and cash equivalents. As of July 31, borrowings against its revolving credit facility were $820 million. Continental had $1.93 billion in available borrowing capacity under its revolving credit facility as of July.
Continental reported a net loss of $119.4 million, or $0.32 per diluted share, for the quarter ending June 30.
John Hart, Continental’s CFO, said the second-quarter results reflect a disciplined approach toward operating costs and capex.
"We are currently cash flow positive and expect to remain so in the second half of the year, especially under our assumption that commodity prices will strengthen,” Hart said. “Our credit metrics are improving and are expected to further improve as we apply asset divestiture proceeds to further reduce debt.”
Darren Barbee can be reached at dbarbee@hartenergy.com
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