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Story by Reuters

Continental Resources Inc, the second-largest North Dakota oil producer, spent $2.3 million at a state land auction for the right to explore for crude on 160 acres, outbidding its nearest rival with just seconds left on the clock.

The deal, secured this week with a check to state officials, shows that despite the more-than 60 percent drop in crude prices since last summer, demand for oil-rich acreage in the state remains high. With most of its mineral rights spoken for, any new auctions tend to elicit strong interest, usually from smaller companies hoping for a sliver of North Dakota’s Bakken shale formation.

While larger industry peers have curbed 2015 output forecasts, Continental has taken a bullish view and expressed confidence oil prices will rebound by December. Chief Executive Harold Hamm told Wall Street last month he expects the company’s output to jump as much as 20 percent this year.

Given that Oklahoma City-based Continental already controls the largest amount of mineral rights in North Dakota, the No. 2 U.S. oil producing state after Texas, it was not immediately clear why it moved aggressively to add to its holdings.

A company representative was not immediately available to comment.

After five days of online bids from privately held Slawson Exploration Co and others, Continental waited until the last 30 seconds of the auction on March 10 to best privately held Tracker Resource Development III LLC by $100 per acre for a bid of $14,200 per acre, according to the state’s Department of Trust Lands.

State officials confirmed that Continental sent the $2.3 million payment earlier this week.

Much of the land is near or under the eastern part of Lake Sakakawea, the dammed portion of the Missouri River that lies near the Fort Berthold Indian Reservation. It’s not known how much oil may lie there, though the reservation alone accounts for roughly a third of the state’s daily oil output.

Continental already operates a well on a nearby spit of land. If it finds oil, it will have to sign a royalty agreement with the state.

The state, which opened bidding at $5,000 per acre and had hoped for at least $10,000, uses the auction proceeds and royalty money from this and 3 million other acres for a trust fund earmarked for educational uses around the state.

Whiting Petroleum Corp is the largest North Dakota oil producer.