Continental Starts Exchange Offer

Zacks

Leading Bakken oil producer, Continental Resources Inc. (CLR) announced an exchange offer of up to $1.5 billion 4.5% senior notes due in 2023. The company aims to fulfill its obligation of registering private notes through this offering, which is expected to close on Jul 12, 2013.

Continental priced these notes back in April in a private placement. Net proceeds from the offering were used to repay the company’s borrowings outstanding under its revolving credit facility and for general corporate purposes.

Oklahoma-based Continental is an independent exploration and production (E&P) company focusing on the Bakken, Cana and Niobrara shale plays. It has leases nearly 1.1 million acres in the Bakken Shale region.

The company operates in the North, South and Eastern regions of the U.S. Its North region is north of Kansas and west of the Mississippi river and comprises North Dakota Bakken, Montana Bakken, the Red River units and the Niobrara play in Colorado and Wyoming. The first two hold maximum promise for Continental.

The Southern region includes Kansas and all properties south of Kansas and west of the Mississippi river, comprising the Anadarko Woodford and Arkoma Woodford plays in Oklahoma. The Anadarko and Arkoma Woodford plays are the second most important for the company.

Continental currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, certain other U.S. E&P firms like EnCana Corporation (ECA), Anadarko Petroleum Corporation (APC) and EOG Resources Inc. (EOG) are expected to outperform the equity market in the next one to three months. All the three stocks currently hold Zacks Rank #2 (Buy).
 

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