Continental, South Korean firm to jointly develop northwest Cana Woodford

Oct. 27, 2014
Continental Resources Inc., Oklahoma City, has formed a joint venture with a wholly owned US subsidiary of SK E&S Co. Ltd. to jointly develop a significant portion of Continental’s northwest Cana Woodford natural gas assets, primarily in Blaine and Dewey counties, Okla.

Continental Resources Inc., Oklahoma City, has formed a joint venture with a wholly owned US subsidiary of SK E&S Co. Ltd. to jointly develop a significant portion of Continental’s northwest Cana Woodford natural gas assets, primarily in Blaine and Dewey counties, Okla.

As part of the deal, Continental sold 49.9% interest in 44,000 net acres in the northwest Cana area, including interests in 37 producing wells, for $360 million.

Continental received $90 million at closing, and SK has committed to pay an additional $270 million to carry 50% of Continental’s remaining share of future drilling and completion costs. Continental has 5 years to utilize the carry, subject to extension under certain circumstances.

The agreement also establishes an area of mutual interest (AMI) in northwest Cana and certain incentives for the joint venture to expand its leasehold position.

Continental will operate all current and future wells that are operated by the joint venture. The company plans to begin drilling in the AMI during November, with four operated rigs running by yearend.