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GlobalData: Continental Resources’ Delaware asset acquisition sees production forecasts reaching 390 000 boe/d in 2022

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Oilfield Technology,

Continental Resources’ decision to acquire Pioneer Natural Resources’ Delaware Basin assets will raise the company’s production by around 58 000 boe/d to reach 390 000 in 2022, according to GlobalData, which notes that this is in comparison to the prediction of 335 000 boe/d the company was expected to produce if the acquisition had not taken place.

GlobalData notes that the deal is set to be the fourth largest merger and acquisition (M&A) deal in 2021.

Justin Allen, Upstream Analyst at GlobalData, comments: “The Permian basin in which the Delaware Basin sits has huge untapped potential and will allow Continental Resources to not only increase its production but optimize density development, wellbore placement and operational efficiency. It will also provide opportunity for further exploration to other parts of the basin. The company’s production was forecast to be rather flat, but its acquisitions have paved the way for positive production growth.”

GlobalData’s report, ‘Key Upstream M&A Deals in 2021’, notes that the Delaware Basin asset includes approximately 92 000 net acres, with net production of approximately 50 000 boe/d and approximately 35 000 bpd - along with 180 miles of pipeline and water infrastructure. Allen also notes Continental’s entry into the Powder River Basin through a US$1.4 billion deal to acquire assets from Samson Resources II back in March 2021. This added approximately 9000 boe/d.

Allen continued: “Continental’s acquisition of Pioneer’s Delaware Basin assets will compliment Continental’s overall deep inventory portfolio in the Bakken, Oklahoma SCOOP/STACK, and the recently acquired Powder River Basin. The transaction is accretive on key financial metrics and supports Continental’s long-term target of 1x net debt to EBITDAX by year end 2022 at $60 WTI.”

Since 2016, Continental Resources has reduced its greenhouse gas (GHG) and methane emission intensities by 40% and 59%, respectively. However, the acquisitions may rise this temporarily.

Allen added: “The acquisitions of the Powder River and Delaware assets will likely see increases in Continental Resources’ methane and GHG emissions in 2022, as it will take time to work the operations of the newly acquired sites into its own workflow and emissions reduction processes.”

While Continental Resources looks to expand upon its multi-basin portfolio, Pioneer Natural Resources is using this opportunity to turn its focus to its primary asset in the Midland Basin. Pioneer holds approximately 1 000 000 net acres and is the largest independent exploration and production (E&P) company in the Midland Basin.

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