Continental Resources Inc., now the king of the Bakken Shale, has expanded its empire to an estimated 1.1 million net acres after completing a deal to buy 119,218 million acres for $649.3 million in cash. The Samson Resources Co. properties in North Dakota, primarily in Williams and Divide counties, have current production estimated at about 6,500 boe/d, 82% weighted to crude oil.

The Oklahoma City-based producer on Thursday said it also has sold for $125 million cash some properties in its Eastern Region operations whose current output is about 1,100 boe/d. The buyer was not disclosed.

Combined, the transactions are expected to reduce 2013 production operating costs to $5.20-5.60/boe from previous 2013 guidance of $5.50-5.90. Production growth next year now is forecast to be higher at 35-40%, compared with previous guidance of 30-35%.

“We bought the Bakken acreage to develop it and expand it,” said CEO Harold Hamm. “This is consistent with our continued concentration of investment in high rate-of-return projects. Together the transactions add 20 net Bakken wells to our 2013 drilling program, in addition to other well completion activities, and eliminate 11 Eastern Region wells.”

What Continental has added to its portfolio includes 45,167 net acres along the Nesson Anticline, 77% held by production (HBP), which are in a jointly developed area of mutual interest (AMI) between Continental, which operates the properties, and Samson. As a result of the transaction, Continental’s average working interest (WI) in the AMI jumps to 71% from 46%.

The other 74,051 net acres are immediately west of the AMI and 40% HBP. Following the acquisition, Continental has an average WI of 34% in the area not within the AMI, but it plans to operate most of the acreage because of the ownership distribution.

The acquisition has “two strategic elements,” said the company. In the AMI, Continental has increased its ownership and added another 25% WI in existing and future operated wells. Also, the company has leveraged its scale and operations efficiency to reduce costs as it transitions to more “Eco-Pad” drilling in the northern part of the Bakken.

In the acreage acquired outside of the AMI, Continental said its strategic focus “is expansion through exploration and new technology.” It already has expanded and derisked the area where it previously had ownership. Recent results include the Selmer 1-35H (75% WI) and Sverdrup 1-36H (48% WI), which had initial 24-hour production test rates of 912 boe/d and 1,313 boe/d, respectively. Also, two of its operated rigs now are drilling in the area outside the AMI.

Management believes the “entire” acquisition has potential for deeper Three Forks development based on three cores taken in 2011.

“This is a classic bolt-on acquisition, from a number of perspectives — strategic, tactical and financial,” said COO Rick Bott. “It fits nicely into our deeper bench Three Forks de-risking plan, and we expect it to add immediate value. Within the next 30 days we plan to spud the first of 10 wells in the northern region, targeting the deeper benches to confirm commercial production and appraise our down-spacing concept, so we can quickly leverage operational efficiencies with pad drilling.”

CFO John Hart said the net effect of the two transactions “should enhance our cash margins. We’re funding the acquisition at attractive rates from our existing revolver and continue to maintain strong liquidity for funding operations.”