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Chord Energy Corp. Expands Williston Basin Footprint with $375 Million Acquisition from Exxon Mobil06/26/2023
Chord Energy Corp.'s subsidiary has entered into an agreement to purchase assets in the Williston Basin from Exxon Mobil, and its affiliates for $375 million.
Chord Energy, a US independent company, is strategically expanding its presence in the Williston Basin of Montana and the Dakotas. While industry attention remains fixated on the Permian Basin, Chord Energy recognizes the potential of the Williston Basin and is capitalizing on the opportunity to enhance its reserve portfolio. Chord Energy successfully completed the acquisition of 62,000 acres in the Williston Basin from XTO Energy for a substantial cash consideration of $375 million.
"The acquired assets are an excellent strategic and operational fit to Chord's premier Williston Basin acreage position," stated Danny Brown, President and Chief Executive of Chord Energy.
"These low-cost, tier-one assets are highly competitive with our existing portfolio and further extend our inventory runway. Consolidation in the core of the basin supports longer laterals, higher capital, and operating efficiencies, strong financial returns, and sustainable free cash flow generation,” he said.
Williston Basin Holdings with Strategic Acquisition
- The deal encompasses production of over 6,000 barrels of oil equivalent per day (62% oil) and 62,000 net acres, with the majority being undeveloped. The acquired assets are primarily located adjacent to Chord Energy's core Indian Hills area.
- Within the acquired acreage, there are 123 estimated net 10,000-ft equivalent locations, with 77 of them being operated by Chord Energy. Approximately 40-50% of these locations are expected to be developed as 3-mile laterals, aligning with Chord Energy's 2023 activity plan.
- Chord Energy's drilling spacing units will expand from 2 miles to 3 miles as a result of the acquired acreage, allowing for enhanced operational efficiency.
Chord Energy: Merger Success
Following a $6 billion merger in 2022, Chord Energy emerged as a major player in the Williston Basin, combining the operations of Oasis Petroleum and Whiting Petroleum. With its headquarters in Houston, Chord Energy presently boasts an extensive land portfolio of approximately 963,000 net acres within the Williston Basin. In the first quarter of 2023, the company achieved a production rate of about 165,000 barrels of oil equivalent per day (BOE/D).
Chord Energy plans to finance the acquisition using its available cash reserves, which amounted to $592 million as of March 31. The transaction is set to conclude by the end of June 2023, pending the completion of standard closing requirements.
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