Under the backdrop of “Energy Week” in Washington, Continental Resources and SK E&S of South Korea announced they will sign a memorandum of understanding Wednesday which expands their existing joint development agreement to consider pursuing other opportunities with US shale plays, including the development and exporting of liquid natural gas.
SK E&S is a subsidiary of SK Group, one of the largest conglomerates in South Korea and part of SK Holdings.
Under the JDA, Continental is currently running five drilling rigs in the Northwest Cana area of the Anadarko Woodford Shale. Harold Hamm, Chairman and CEO of Continental Resources said in a phone interview with CNBC that each rig currently employs approximately 100 people.
“When Continental adds a new rig in October, that’s an additional 100 new jobs in Oklahoma,” said Hamm. “This is just the tip of the iceberg in terms of jobs. Permits that were delayed under the former administration for years are now being approved under President Trump’s administration. That means more jobs can be created.”
Under the original agreement inked in October 2014, Continental sold a 49.9 percent interest in approximately 44,000 net acres in the Northwest Cana area of the Anadarko Woodford Shale, including interest in 37 producing wells for a total of $360 million. Today, the JDA controls approximately 100,000 net mineral acres.
“SK comes with the capital to develop resources here and has a market for this supply of natural gas.” Explained Hamm. “By 2019 the United States will expand our exports 500 percent. In the US we are currently exporting 2.5bcf and will increase to 11 bcf by 2019. If we keep permits coming through on facilities, we can grow that amount of gas around the globe to 30 bcf by 2025, 2030. This creates jobs and opportunity for everybody.”
Hamm, who had a series of meetings in Asia in early June, is looking to expand Continental Resources LNG footprint.
“This expansion gives CLR further entry into Asia. SK is set up to sell and trade LNG from America to other countries. Not just South Korea. Trade in America is very important to them. This signing is more than symbolic. It’s the future of America’s energy expansion.” Hamm said.