Bakken Shale-focused oil and gas company Continental Resources Inc. is planning a $700 million senior notes offering in addition to updating its plans for Wheatland Oil assets in the Bakken.
The Continental Resources Inc. intends to offer $700 million in aggregate principal amount of new senior notes in a private placement to eligible purchasers. The new notes will be part of the series of 5% Senior Notes due 2022 issued by the company on March 8, 2012. Continental intends to use the net proceeds of this offering to repay borrowings outstanding under its revolving credit facility and for general corporate purposes.
The company intends to use the net proceeds to repay borrowings outstanding under its revolver. As of the end of the second quarter, the company’s outstanding balance was $537 million, noted Global Hunter Securities (GHS) in a note to investors Monday.
The company recently held its 2Q12 earnings call, during which management announced its plan to increase its 2012 CAPEX budget to $3 billion from the previous $2.3 billion, and updated its Wheatland Oil acquisition status.
High crude oil prices are currently driving production in the Bakken, where an estimated $7 billion will be spent in 2012 for hydraulic fracturing in the play.
Shareholders approved the deal in which Continental will purchase the principal assets of Enid, OK-based Wheatland Oil Inc. Looking to boost its position in the oil-rich Bakken, the company announced the $340 million deal in March of this year.
The assets are an ownership of roughly 5% of Continental’s interest in all leases and wells in a defined portion of the Bakken, noted GHS analysts.
Wheatland is 75% owned by Continental chairman Harold Hamm and 25% owned by Continental vice chairman of strategic growth initiatives, Jeff Hume. Wheatland's assets include 37,900 net acres in North Dakota and Montana Bakken play, interests in over 1,000 gross wells, with proved reserves of 17 MMboe and production of 2.5 Mboepd at year-end 2011.