HOUSTON, July 23 (Reuters) - U.S. shale producer

Continental Resources has dropped a lawsuit it filed against

rival Hess Corp in May, which alleged 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.

Continental, Hess and Chevron ( CVX ), which closed its

acquisition of Hess last week, did not respond to requests for

comment.

(Reporting by Georgina McCartney in Houston)