Continental Resources sued over failed $200MM oil deal

By Rachel Adams-Heard on 4/28/2020

HOUSTON (Bloomberg) --Continental Resources Inc. is being sued by a closely held oil driller that accused the shale giant of walking away from a $200 million deal following an historic collapse in crude prices.

Casillas Petroleum Resource Partners and Continental signed a so-called purchase and sale agreement on March 6, according to the lawsuit, one trading session before crude tumbled about $10 a barrel for the worst daily crash in almost 20 years.

“Almost immediately after the execution” of the contract, Continental sought to delay the closing that was set for the end of March, Casillas said in the suit filed in Tulsa County District Court in Oklahoma.

On March 24, Casillas said Continental sent a letter attempting to terminate the deal, citing issues that included alleged wastewater incidents. Casillas said it faces “irreparable harm” if Continental doesn’t hold up its end of the original agreement.

A representative for Continental didn’t immediately respond to a request for comment. Reuters first reported the lawsuit.

It’s the latest example of an oil and gas deal running into snags amid the unprecedented plunge in crude prices. BP Plc was forced to renegotiate the terms of a sale of its Alaska business to Hilcorp Energy Co., and Devon Energy Corp. had to revise its sale of North Texas shale assets to Banpu Kalnin Ventures LLC.

The case is Casillas Petroleum Resource Partners II LLC vs. Continental Resources Inc. Docket: CJ-2020-1346

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