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Continental Enters the Permian; Acquires Asset from Pioneer

Announced Date
November 05,2021
Deal Value $
3,100,000,000
Net Acres
92,000
Transaction Type
Property
Buyer
Seller
Price Per BOE $
40,000
Source Documents:
   Source Link
   Source Link
Location
Region
Permian - Delaware Basin

Country
United States

State
Texas

County
Ward ,Pecos ,Reeves

Play


Production
Production
5,500 Boe/d

Production Mix
70 % Oil


Multiples
Production ($/boe/d)
563,636

$Price/Net Acre
33,696

$Price/Adj. Net Acre
31,304

Adj. $/acre is based on production @40,000 Boe/d

Transaction Details: 

Continental Resources has entered into the Permian Basin through its acquisition of assets from Pioneer Natural Resources in an all-cash transaction valued at approximately $3.1 billion.

The deal will have an effective date of October 1, 2021 and it closed on December 21, 2021.

Transaction Summary

  • Land: 92,000 net acres (50k net royalty & 31k net surface)
  • Production: 55,000 boe/d (~70% oil), 98% operated with over 90% of acreage held by production
  • Locations: 650 Gross Locations in Third Bone Spring/Wolfcamp A & B; over 1,000 total locations

Key Transaction Highlights:

  • Projected to generate $750 MM of annual cash flow from operations & $500 MM of annual free cash flow (non-GAAP) in 2022 at current prices
  • PDP represents ~75% of transaction price; ~55 MBoepd (~70% oil).
  • 92, K contiguous net leasehold acres.
  • 98% operated with over 90% of acreage held by production.  
  • 50 K net royalty acres and 31 K net surface acres.
  • Extensive water infrastructure in place.
  • Over 650 gross operated locations in Third Bone Spring/Wolfcamp A & B; over 1,000 total locations, including additional zones producing in the basin.  

Map

 

"Continental's foundation has always been built upon a strong geology-led corporate strategy. This continues today and has directly led us to our new strategic position in the Permian Basin. This acquisition will complement our existing deep inventory portfolio in the Bakken, Oklahoma and most recently, the Powder River Basin. In addition to the competitive geologic attributes, this transaction is accretive on key financial metrics and supports our long term target of 1.0x net debt to EBITDAX by year end 2022 at $60 WTI," said Bill Berry, Chief Executive Officer.

"These Permian assets contain the key strategic components common to all of our assets with significant untapped potential to enhance performance through optimized density development, wellbore placement, operational efficiencies and further exploration," said Jack Stark, President & Chief Operating Officer.

Citi Global Market, Inc. is serving as the Company's financial advisor and White & Case LLP is serving as the Company's legal advisor with respect to this transaction.

Permian - Delaware Basin Deal Activity In Last 12 Months



Other Permian - Delaware Basin Region's Deals



Announced DateBuyerSellerDeal Value($mm)LocationCategory
Jun-28-2022 - - Click here New Mexico  E&P
May-19-2022 - - Click here Texas  E&P
Nov-08-2021 - - Click here New Mexico  E&P
Nov-03-2021 - - Click here Texas  E&P
Aug-09-2021 - - Click here Texas  E&P

Price History



Date Deal Headline Price$/acre
Jun-28-2022 Earthstone to Acquire Permian Assets of PE-Backed E&P for $627 Million - -
May-19-2022 Centennial and PE-Backed Colgate Combine - -
Nov-08-2021 Colgate Bolts On 22,000 Net Acres in the Delaware Basin for $190MM - -

Other Pioneer Natural Resources Co. Deals



Announced DateBuyerSellerDeal Value($mm)LocationCategory
Sep-20-2021 - - Click here Texas  E&P
Apr-01-2021 - - Click here Texas  E&P
Oct-20-2020 - - Click here Texas  E&P
Dec-09-2019 - - Click here Texas  E&P
May-07-2019 - - Click here Texas  E&P