Was it only a matter of time before Okla. City-based Continental Resources jumped into the Permian pool? Founded in 1967, the company until now has kept its E&P activity squarely in the Bakken and Anadarko, along with a small acquisition earlier this year in the Powder River Basin. But some deals may be just too good to pass up, especially when the free cash-flow fire is as hot as oil prices. Reese Energy Consulting today is following the latest news from Continental, which came off its 3Q earnings report to announce a $3.25 billion all-cash deal with the Permian’s largest operator, Pioneer Resources. The acquisition includes drilling rights across 92,000 net acres in the Delaware and 50 MBOEPD in production, allowing Continental to generate an extra half-billion dollars in annual free cash flow next year at current prices. Now, by all accounts it’s difficult to separate this company from the man who created it—billionaire wildcatter Harold Hamm who retired his CEO role last year to chair the board. His self-described “heart of a geologist” led him to the Bakken in 1995 where he introduced the combination of horizontal drilling and fracking. Now it’s leading him to the Permian. And while analysts have expressed uncertainty over the company’s latest move into a basin it doesn’t know, we’ll happily put our bucks on Continental.
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Continental Resources, Inc. is an American petroleum and natural gas exploration and production company based in the Continental Oil Center in Oklahoma City. The company was founded by Harold Hamm in 1967 at the age of 21 as Shelly Dean Oil Company, originally named for Hamm’s two daughters.