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Storage tanks stand on a Continental Resources oil production site near Williston, North Dakota January 23, 2015. REUTERS/Andrew Cullen

Continental Resources adds to oil acreage at North Dakota auction

WILLISTON, N.D. – Continental Resources Inc, the second-largest North Dakota oil producer, spent $2.3 million at a state land auction for the right to explore for crude on 160 acres, outbidding its nearest rival with just seconds left on the clock.

The deal, secured this week with a check to state officials, shows that despite the more-than 60 percent drop in crude prices since last summer, demand for oil-rich acreage in the state remains high. With most of its mineral rights spoken for, any new auctions tend to elicit strong interest, usually from smaller companies hoping for a sliver of North Dakota’s Bakken shale formation.

While larger industry peers have curbed 2015 output forecasts, Continental has taken a bullish view and expressed confidence oil prices will rebound by December. Chief Executive Harold Hamm told Wall Street last month he expects the company’s output to jump as much as 20 percent this year.

Given that Oklahoma City-based Continental already controls the largest amount of mineral rights in North Dakota, the No. 2 U.S. oil producing state after Texas, it was not immediately clear why it moved aggressively to add to its holdings.

A company representative was not immediately available to comment.

Related: Continental Bakken reserves continue to grow

After five days of online bids from privately held Slawson Exploration Co and others, Continental waited until the last 30 seconds of the auction on March 10 to best privately held Tracker Resource Development III LLC by $100 per acre for a bid of $14,200 per acre, according to the state’s Department of Trust Lands.

State officials confirmed that Continental sent the $2.3 million payment earlier this week.

Much of the land is near or under the eastern part of Lake Sakakawea, the dammed portion of the Missouri River that lies near the Fort Berthold Indian Reservation. It’s not known how much oil may lie there, though the reservation alone accounts for roughly a third of the state’s daily oil output.

Continental already operates a well on a nearby spit of land. If it finds oil, it will have to sign a royalty agreement with the state.

The state, which opened bidding at $5,000 per acre and had hoped for at least $10,000, uses the auction proceeds and royalty money from this and 3 million other acres for a trust fund earmarked for educational uses around the state.

Whiting Petroleum Corp is the largest North Dakota oil producer.

(Reporting by Ernest Scheyder; Editing by Terry Wade and Gunna Dickson)

This article was written by Ernest Scheyder from Reuters and was legally licensed through the NewsCred publisher network.

28 comments

  1. More proof these companies are waiting, not folding.

  2. Nice Ebay move by Continental.

  3. Why does the state need to give more land up for oil along and underneath Sakakawea! Is the 2.3 million going to make or break us. NO but a reckless oil spill could ruin the upper Missouri River system. WTF. EFFF OUR STATE.

  4. They paid way to much. But hey it’s their money they can blow it however they see fit.

  5. It would be nice if they paid the common person like they do the oil companies . Instead they want to screw the small guy.

  6. 2.3 for a quarter section…all that does is artificially raise the price of entry for everyone else

  7. Get over to Montana and lease my land in Sheridan County.

  8. Interesting. I guess good for me and others. I made it til the last layoff with Continental. Hopefully I’ll be back and my O&G family will be back to work sooner than later. Pray to God we are.

  9. Brandon McBride #jobsecurity

  10. Juian Satanas Flores Abigael Chavira

  11. Wonder who the poor mineral right owners that the State stole these acres from?