Continental in JV to develop Oklahoma assets

Continental Resources has formed a joint venture with a subsidiary of SK E&S Company Ltd., to develop a significant portion of Continental’s Northwest Cana Woodford natural gas assets, in Blaine and Dewey counties, Oklahoma.

Continental sold a 49.9% interest in approximately 44,000 net acres in the highly prospective Northwest Cana area of the Anadarko Woodford Shale play, including interests in 37 producing wells, for total consideration of approximately US$ 360 million.

US shale gas investment

Commenting on the partnership, Continental CEO, Harold G. Hamm, said: "We are excited to establish this joint venture with such an established and highly regarded major international energy company. We are proud SK has chosen to join with Continental in SK's initial investment in US shale natural gas."

J. J. Yu, President and CEO of SK E&S, added: "SK E&S is pleased to join with Continental Resources, a proven leader in developing US unconventional resource plays, in what we expect will be a long-term strategic relationship in energy production."

Drilling programme

The agreement establishes an area of mutual interest (AMI) in Northwest Cana and certain incentives for the joint venture to expand its leasehold position. Continental will be the operator for all current and future wells that are operated by the joint venture. The company plans to commence drilling in the AMI during November 2014, with four operated rigs running by the end of 2014.

"This joint venture is consistent with our strategy to enhance the value of all our assets," said Jack H. Stark, Continental's President and COO. "The structure creates a joint venture that we expect will be cash flow positive for Continental throughout the life of the project and should deliver single-well economics that compete with any other wells in our world-class inventory when the carry is applied."

"Our agreement with Continental underscores SK's 20-plus year commitment to the US market as a platform for the globalisation of our energy business and as a source of value-creation for stakeholders in both companies," concluded Shaun Parvez, President of SK E&S Americas.

Adapted from press release by Katie Woodward

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/30102014/continental-jv-to-develop-gas-assets-1735/