The litigation points to Hess’ operation of approximately 483 wells in the Williston Basin, North Dakota. Credit: SOMKID THONGDEE/Shutterstock.

Continental Resources has reportedly initiated legal action against Hess, alleging that the company has been defrauded out of as much as $69m, according to a report by Reuters.

The lawsuit, filed in a federal court in Houston, accuses Hess of inflating midstream service fees via transactions with its subsidiaries.

These transactions affected Continental’s revenue from oil and gas production wells, in which the company holds a non-operating working interest.

The litigation points to Hess’ operation of approximately 483 wells in the Williston Basin, North Dakota.

According to the lawsuit, net revenues for hydrocarbons have been significantly reduced due to the excessive service fees paid to Hess Midstream Partners, the report said.

Continental, based in Oklahoma, claims that Hess has prioritised the transfer of value to its midstream assets, neglecting the best interests of non-operating working interest owners.

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Hess Midstream, in which Hess Corp holds a 38% interest, has seen an increase in throughput volumes across gas processing, oil terminals and water gathering, as reported in its earnings last month.

The financial impact on Continental is substantial, with an estimated loss of revenue ranging from $34m to $69m, according to the lawsuit.

Continental has stated that it does not comment on pending litigation. Meanwhile, Hess has not provided a response to the allegations.

In a related development, an arbitration is scheduled for 26 May concerning the dispute between Exxon and Chevron over Chevron’s proposed $53bn acquisition of Hess.

This acquisition, which includes the significant Stabroek block off the coast of Guyana, has been a contentious issue between the two leading US oil producers for the past 18 months.

Exxon, which filed the arbitration claims in March last year, operates the Stabroek block with a 45% interest, alongside CNOOC with a 25% stake.