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Continental negotiating sale of part of its $1.5B water infrastructure business from SNL Daily Gas Report Continental negotiating sale of part of its $1.5B water infrastructure businessByline: Everett Wheeler Continental Resources Inc. executives said they are evaluating the sale of a portion of the company's remaining water infrastructure assets, which they value in excess of $1.5 billion, with proceeds from the sale earmarked for shareholders. Continental CEO and director William Berry said during the company's Feb. 27 earnings call that its 2020 program should generate between $350 million and $400 million of free cash flow at $55 per barrel West Texas Intermediate oil prices. The company's 2020 capital budget is flat year over year at $2.65 billion and down 20% from the level planned in the company's original five-year vision. It is targeting year-over-year production growth of between 4% and 6%, with 2020 crude oil production projected between 198,000 and 201,000 barrels per day and natural gas production projected between 935,000 and 960,000 Mcf per day. Berry said Continental would release more details about the water infrastructure deal later in the year. "We have a process that's currently underway, so it's probably inappropriate for us to further comment on it. But looking to any cash flow that we're seeing coming in beyond that $350 million to $400 million range, that's one of the things you're going to see us flowing 100% back to shareholders," Berry said. "We're looking at the assets we have and packaging it in the approach that's most advantageous to us and most marketable to the group that's out there. We have seen a pretty strong demand for these resources in our discussions. And so we think that we have a pretty good path to certainty on this." "It's also an asset that's going to grow significantly over the next few years. So if we hold a portion of it, it's got a lot greater value in the future," Continental founder and Executive Chairman Harold Hamm added. Continental's water infrastructure segment provides gathering and disposal services for water used in drilling in the Bakken Shale of North Dakota and the SCOOP and STACK fields of Oklahoma. In July 2019, the company announced an $85 million deal to sell a water gathering system in the STACK play to Macquarie Group Ltd.-backed water midstream company Lagoon Water Solutions LLC. |
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Msg # | Subject | Author | Recs | Date Posted |
180 | Re: Continental negotiating sale of part of its $1.5B water infrastructure business | delt1970 | 0 | 3/5/2020 6:43:16 PM |