OKLAHOMA CITY — Continental Resources, Inc. announced the sale of its eastern STACK water gathering and recycling system in Blaine County, Oklahoma for $85 million to Lagoon Water Solutions (“Lagoon”). Along with the divestiture, Continental has entered into a long-term arrangement with Lagoon to provide water sourcing, gathering and disposal services for Continental’s future development in the area.
Continental owns and operates three additional water infrastructure systems in Oklahoma, as well as ten additional systems in the Bakken. “The divestiture of this water handling facility for $85 million underscores Continental’s ability to innovatively generate value from its assets. This system represents a small portion of the water handling facilities Continental owns, which we value at approximately $1 billion,” said Harold Hamm, Chairman and Chief Executive Officer. “These facilities contain significant added value for our shareholders.”
The Company also announced the following strategic initiatives:
Bolt-On Acquisition: The Company has acquired additional leasehold in SCOOP from an undisclosed party for $79.5 million. This acquisition adds up to 150 gross operated Woodford and Sycamore locations to the Company’s inventory. Associated drilling and completion activity on this acquired position is expected to add an estimated $20 million of unbudgeted spend to the Company’s 2019 capital expenditures.
Acreage Trades: Year-to-date, Continental has executed several strategic acreage trades that have added 3,000 net acres within the Company’s core operating areas. These trades have increased the Company’s working interest in several high valued operated units being developed this year, adding an estimated $35 million of unbudgeted spend to the Company’s 2019 capital expenditures.
Minerals Update: The Company’s mineral acquisitions activity for the year has been front end loaded, with over 75% of the allocated $125 million spent in the first half of 2019. To capitalize on favorable market conditions, Continental and Franco-Nevada have agreed to increase the total mineral spend in 2019 from $125 million to $150 million. Continental will recoup 80% of the total spend from Franco-Nevada throughout the year.
These strategic initiatives will add significant value for the Company’s shareholders in 2020 and beyond. The Company remains disciplined and is committed to its corporate objectives. Excluding the aforementioned unbudgeted items, Continental Resources is tracking towards its $2.6 billion capital expenditures budget.