HOUSTON, May 19 (Reuters) - U.S. shale producer

Continental Resources has filed a lawsuit against Hess Corp ( HES )

alleging that it was defrauded out of up to $69 million

through a series of deals the well operator conducted with its

subsidiaries.

Continental said that Hess, which operates hundreds of

wells in North Dakota, artificially inflated midstream service

fees by entering into agreements with its own subsidiaries. Net

revenues for hydrocarbons from the wells, in which Continental

holds a non-operating working interest, were far below market

value due to excessive service fees paid to Hess Midstream

Partners, the lawsuit said.

"Hess Corp ( HES ) has transferred value from its upstream assets to

its midstream assets rather than operate with the best interests

of non-operating working interest owners in mind," said the

lawsuit filed in a federal court in Houston.

Hess Bakken Investments, a Hess subsidiary, operates about

483 producing wells in the Williston Basin in which Continental

owns a working interest. Continental is based in Oklahoma City,

Oklahoma.

Hess Corp ( HES ) has a 38% interest in Hess Midstream, which owns

oil, gas and produced water handling assets primarily in the

Bakken and Three Forks shale plays, Continental said. As a

result, Continental said, it and other non-operating working

interest owners in those wells bear a larger financial burden

than Hess for midstream fees.

Continental has been deprived of about $34 million to $69

million of revenue for oil and gas production, the filing said.

Hess Midstream's throughput volumes rose 8% for gas

processing, 7% for oil terminaling and 9% for water gathering in

the first quarter, compared with the year-ago period, mainly due

to higher production, the company said in its earnings report

last month.

Continental Resources said it does not comment on pending

litigation.

Hess did not immediately respond to requests for comment.