UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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Introductory Note
As previously disclosed in the Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on October 17, 2022, Continental Resources, Inc., an Oklahoma corporation (“Continental” or the “Company”), entered into an Agreement and Plan of Merger, dated as of October 16, 2022 (the “Merger Agreement”), with Omega Acquisition, Inc., an Oklahoma corporation (“Merger Sub”), incorporated by Harold G. Hamm (the “Founder”).
Pursuant to the Merger Agreement, Merger Sub commenced a tender offer (the “Offer”) to acquire all of the outstanding shares of common stock, par value $0.01 (the “Shares”), of the Company, other than: (i) Shares owned by the Founder, certain of his family members and their affiliated entities (collectively, the “Hamm Family”) and (ii) shares underlying unvested equity awards issued pursuant to the Company’s long-term incentive plans (collectively, “Rollover Shares”) for $74.28 per Share (the “Offer Price”), in cash, without interest and subject to deduction for any required withholding taxes.
The Offer expired at one minute after 11:59 p.m., New York City time, on November 21, 2022. American Stock Transfer & Trust Co., LLC, in its capacity as depositary for the Offer, advised that, as of the expiration of the Offer, a total of 36,312,840 Shares were validly tendered and not validly withdrawn pursuant to the Offer, representing approximately 62.5% of the outstanding Shares other than Rollover Shares. In addition, Notices of Guaranteed Delivery have been delivered for 3,443,485 Shares, representing approximately 5.9% of the outstanding Shares other than Rollover Shares. Each condition to the Offer was satisfied, and, on November 22, 2022, Merger Sub irrevocably accepted for payment all Shares that were validly tendered and not withdrawn.
On November 22, 2022, immediately prior to the Acceptance Time, the Founder contributed 100% of the capital stock of Merger Sub to the Company. In addition, following consummation of the Offer, Merger Sub merged with and into the Company, with the Company surviving the merger (the “Merger”). The Merger was completed pursuant to Section 1081.H of the General Corporation Act of the State of Oklahoma (the “OGCA”), with no vote of the Company’s shareholders required to consummate the Merger. At the effective time of the Merger (the “Effective Time”), each issued and outstanding Share (other than (i) the Rollover Shares; (ii) Shares owned by the Company as treasury stock or owned by any wholly owned subsidiary of the Company, including Shares irrevocably accepted by Merger Sub pursuant to the Offer; and (iii) Shares held by a holder who is entitled to demand and properly demanded appraisal for such Shares in accordance with Section 1091 of the OGCA), was converted into the right to receive an amount in cash equal to the Offer Price (the “Merger Consideration”), without interest and subject to any required tax withholding.
Also at the Effective Time: (i) the Rollover Shares owned by the Hamm Family and outstanding prior to the Effective Time were converted into an identical number of newly issued shares of the Company, as the surviving corporation, having identical rights to the previously existing Shares held by such holder, and such converted shares of the surviving corporation were the only capital stock of the surviving corporation outstanding immediately following the Merger; and (ii) the Rollover Shares underlying each unvested restricted stock award (“Company RS Award”) were replaced with a restricted stock unit award covering the same number of shares of the Company, as the surviving corporation, as the number of Shares covered by the Company RS Award immediately prior to the Effective Time that provides the holder of such canceled restricted stock award with the right to receive, for each share of common stock of the surviving corporation, upon vesting of such restricted stock unit, and at the surviving corporation’s sole discretion, a share of the surviving corporation, cash in a substantially equivalent amount, or any combination of the two, in each case, together with any unpaid dividends accrued on such restricted stock award.
The foregoing summary of the Merger Agreement and the transactions contemplated by the Merger Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement attached as Exhibit 2.1 to the Current Report on Form 8-K filed by the Company on October 17, 2022 and incorporated by reference.
| Item 2.01. | Completion of Acquisition or Disposition of Assets |
On November 22, 2022, the Offer and the Merger were completed as described under “Introductory Note.”
The aggregate consideration paid by Merger Sub in the Offer and the Merger to purchase all outstanding Shares (other than the Shares already owned by the Hamm Family), was approximately $4.2 billion. Continental provided Merger Sub with the necessary funds to fund the Offer and the Merger from its cash on hand, availability under its revolving credit agreement and borrowing capacity under a term loan.
The information contained in the Introductory Note of this Current Report on Form 8-K is incorporated by reference into this Item 2.01.
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| Item 3.01. | Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing |
In connection with the consummation of the Merger, the Company: (i) notified the New York Stock Exchange (the “NYSE”) of the consummation of the Merger; and (ii) requested that the NYSE (x) suspend trading of the Shares on the morning of November 23, 2022, prior to market open, and (y) file with the SEC a Notification of Removal from Listing and/or Registration on Form 25 to delist and deregister the Shares under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Additionally, the Company intends to file with the SEC a Certification and Notice of Termination of Registration on Form 15 under the Exchange Act, requesting that the Company’s reporting obligations under Section 15(d) of the Exchange Act be suspended, at the time such filing is permitted under SEC rules.
| Item 3.03. | Material Modification to Rights of Security Holders |
The information contained in the Introductory Note and Items 2.01 and 3.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.03.
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
Upon completion of the Merger on November 22, 2022, in accordance with the Merger Agreement, Merger Sub’s sole director immediately before the Merger, Mr. Hamm, became the sole director of the Company. Accordingly, each of William B. Berry, Timothy G. Taylor, John T. McNabb II, Ellis L. McCain, Mark E. Monroe and Shelly G. Lambertz ceased serving as members of the Company’s board of directors at the Effective Time. These departures were solely in connection with the Merger and not a result of any disagreement with the Company, its management or its board of directors.
Pursuant to the Merger Agreement, the officers of the Company immediately prior to the Effective Time continued as the officers of the Company as the surviving corporation following the Effective Time and will hold office at the pleasure of the board of directors of the Company as the surviving corporation and in accordance with the Company’s bylaws.
| Item 8.01. | Other Items |
On November 22, 2022, the Company issued a press release announcing the completion of the Offer and the anticipated completion of the Merger, which is attached hereto as Exhibit 99.1 and incorporated by reference into this Item 8.01.
| Item 9.01. | Financial Statements and Exhibits |
(d) The following exhibits are included with this Report:
| Exhibit |
Description | |
| 2.1 | Agreement and Plan of Merger, dated as of October 16, 2022, by and between Continental Resources, Inc. and Omega Acquisition, Inc. (incorporated by reference to Exhibit 2.1 to Continental Resources Inc.’s Current Report on Form 8-K (Commission File No. 001-32886) filed October 17, 2022). | |
| 99.1 | Press release, dated November 22, 2022. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 22, 2022
| CONTINENTAL RESOURCES, INC. | ||
| By: | /s/ James R. Webb | |
| Name: | James R. Webb | |
| Title: | Senior Vice President, General Counsel, Chief Risk Officer & Secretary | |
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Exhibit 99.1
Continental Announces Expiration of Tender Offer Period for Outstanding Shares
Completion of Previously Announced Merger and Going Private Transaction Expected Later Today
OKLAHOMA CITY, OKLAHOMA – November 22, 2022 – Continental Resources, Inc. (NYSE: CLR) today announced that it is initiating the final steps in closing its previously announced merger with Omega Acquisition, Inc. (“Merger Sub”). Following the completion of the merger, shares of Continental common stock are expected to cease trading on the New York Stock Exchange (“NYSE”) prior to market open on Wednesday, November 23, 2022, and will no longer be listed for trading on the NYSE. Merger Sub’s tender offer to purchase any and all outstanding shares of Continental’s common stock, other than (i) shares of common stock owned directly or indirectly by Mr. Hamm and the Hamm family and (ii) shares of common stock underlying unvested equity awards issued pursuant to Continental’s long-term incentive plans (the “Rollover Shares”) expired one minute after 11:59 p.m. (New York City time) on November 21, 2022. As of 5:00 pm (New York City time) on November 21, 2022, a total of 36,312,840 shares of Continental common stock were validly tendered and not validly withdrawn pursuant to the tender offer, representing approximately 62.5% of the outstanding shares of Continental common stock not already owned by the Hamm family. In addition, “Notices of Guaranteed Delivery” have been delivered for 3,443,455 shares of Continental common stock, representing approximately 5.9% of the outstanding shares not already owned by the Hamm family. Merger Sub intends to accept for payment in accordance with the terms of the tender offer all shares of Continental common stock that were validly tendered and not validly withdrawn as of the expiration of the tender offer.
Merger Sub will be merged with and into Continental in accordance with Section 1081.H of the General Corporation Act of the State of Oklahoma (the “OGCA”), with Continental continuing as the surviving corporation wholly owned by the Hamm family. Each remaining share of Continental common stock not purchased in the tender offer (other than (i) the Rollover Shares, (ii) shares owned by the Company as treasury stock or owned by any wholly owned subsidiary of the Company, including shares irrevocably accepted by Merger Sub pursuant to the tender offer, and (iii) shares held by a holder who is entitled to demand and properly demanded appraisal for such shares in accordance with Section 1091 of the OGCA) will be converted into the right to receive $74.28 in cash, without interest, and subject to deduction for any required withholding taxes.
About Continental Resources
Continental Resources (NYSE: CLR) is a top 10 independent oil producer in the U.S. and a leader in America’s energy renaissance. Based in Oklahoma City, Continental is the largest leaseholder and the largest producer in the nation’s premier oil field, the Bakken play of North Dakota and Montana. Continental is also the largest producer in the Anadarko Basin of Oklahoma and is the second largest leaseholder in the Powder River Basin of Wyoming and tenth largest in the Permian Basin of Texas. With a focus on the exploration and production of oil, Continental has unlocked the technology and resources vital to American energy independence and our nation’s leadership in the new world oil market. In 2022, Continental will celebrate 55 years of operations. For more information, please visit www.CLR.com.
Cautionary Statement for the Purpose of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements included in this press release other than statements of historical fact, including, but not limited to, forecasts or expectations regarding the Company’s business and statements or information concerning the transactions contemplated by the Merger Agreement, the Company’s future operations, performance, financial condition, production and reserves, schedules, plans, timing of development, rates of return, budgets, costs, business strategy, objectives, and cash flows are forward-looking statements. When used in this press release, the words “could,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “budget,” “target,” “plan,” “continue,” “potential,” “guidance,” “strategy,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.
Forward-looking statements are based on the Company’s current expectations and assumptions about future events and currently available information as to the outcome and timing of future events. Although the Company believes these assumptions and expectations are reasonable, they are inherently subject to numerous business, economic,
competitive, regulatory and other risks and uncertainties, most of which are difficult to predict and many of which are beyond the Company’s control. No assurance can be given that such expectations will be correct or achieved or that the assumptions are accurate. With respect to the transactions contemplated by the Merger Agreement described above, risks and uncertainties include the timing and/or occurrence of the consummation of such transactions and the Company’s plans for financing such transactions. With respect to the Company’s operations generally, the risks and uncertainties include, but are not limited to, commodity price volatility; the geographic concentration of our operations; financial market and economic volatility; the effects of any national or international health crisis; the inability to access needed capital; the risks and potential liabilities inherent in crude oil and natural gas drilling and production and the availability of insurance to cover any losses resulting therefrom; difficulties in estimating proved reserves and other reserves-based measures; declines in the values of our crude oil and natural gas properties resulting in impairment charges; our ability to replace proved reserves and sustain production; our ability to pay future dividends or complete share repurchases; the availability or cost of equipment and oilfield services; leasehold terms expiring on undeveloped acreage before production can be established; our ability to project future production, achieve targeted results in drilling and well operations and predict the amount and timing of development expenditures; the availability and cost of transportation, processing and refining facilities; legislative and regulatory changes adversely affecting our industry and our business, including initiatives related to hydraulic fracturing and greenhouse gas emissions; increased market and industry competition, including from alternative fuels and other energy sources; the impact of the transactions contemplated by the Merger Agreement on such operations and the other risks described under Part I, Item 1A. Risk Factors and elsewhere in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, registration statements and other reports filed from time to time with the SEC, and other announcements the Company makes from time to time.
Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which such statement is made. Should one or more of the risks or uncertainties described in this press release occur, or should underlying assumptions prove incorrect, the Company’s actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. Except as otherwise required by applicable law, the Company undertakes no obligation to publicly correct or update any forward-looking statement whether as a result of new information, future events or circumstances after the date of this report, or otherwise.
Readers are cautioned that initial production rates are subject to decline over time and should not be regarded as reflective of sustained production levels. Production from horizontal drilling in shale oil and natural gas resource plays and tight natural gas plays that are stimulated with extensive pressure fracturing are typically characterized by significant early declines in production rates.
We use the term “EUR” or “estimated ultimate recovery” to describe our best estimate of recoverable oil and natural gas hydrocarbon quantities. Actual reserves recovered may differ from estimated quantities. EUR data included herein, if any, remain subject to change as more well data is analyzed.
| Investor Contact: | Media Contact: | |
| Rory Sabino | Kristin Thomas | |
| Vice President, Investor Relations | Senior Vice President, Chief Communications Officer | |
| 405-234-9620 | 405-234-9480 | |
| Rory.Sabino@CLR.com | Kristin.Thomas@CLR.com |
Document and Entity Information |
Nov. 22, 2022 |
|---|---|
| Cover [Abstract] | |
| Entity Registrant Name | CONTINENTAL RESOURCES, INC |
| Amendment Flag | false |
| Entity Central Index Key | 0000732834 |
| Document Type | 8-K |
| Document Period End Date | Nov. 22, 2022 |
| Entity Incorporation State Country Code | OK |
| Entity File Number | 001-32886 |
| Entity Tax Identification Number | 73-0767549 |
| Entity Address, Address Line One | 20 N. Broadway |
| Entity Address, City or Town | Oklahoma City |
| Entity Address, State or Province | OK |
| Entity Address, Postal Zip Code | 73102 |
| City Area Code | (405) |
| Local Phone Number | 234-9000 |
| Written Communications | false |
| Soliciting Material | false |
| Pre Commencement Tender Offer | false |
| Pre Commencement Issuer Tender Offer | false |
| Security 12b Title | Common Stock, $0.01 par value |
| Trading Symbol | CLR |
| Security Exchange Name | NYSE |
| Entity Emerging Growth Company | false |