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Chord Energy Corp. Expands Williston Basin Footprint with $375 Million Acquisition from Exxon Mobil
06/26/2023![Chord-Energy-Corp-Expands-Williston-Basin-Footprint-with-$375-Million-Acquisition-from-Exxon-Mobil](https://images2.rextag.com/public/blog/160Blog_Chord Energy Corp to acquire Williston Basin acreages.png)
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 $592 million as of March 31. The transaction is set to conclude by the end of June 2023, pending the completion of standard closing requirements.
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Bakken's Tipping Point: Grayson Mill's Potential Fall After Chevron-Hess
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/R-230(1)Blog_Grayson Mill acquired Ovintiv's Bakken assets for $825M in 2024.png)
The Permian Basin, a big oil area, is not seeing as many deals as before because lots of companies have already joined together. Now, experts think these companies might start looking for new places to invest in the U.S. One area getting attention is the Bakken play. Chevron Corp. has just made a big step there by buying Hess Corp. for $60 billion. Another company, Grayson Mill Energy, which got some help from a Houston investment firm EnCap Investments LP, might also be up for sale soon, worth about $5 billion.
Exploring the Energy Lifeline: A Tour of Williston Basin's Midstream Infrastructure
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/R-149 - Blog Exploring the Energy Lifeline_ A Tour of Williston Basin's Pipeline Infrastructure.png)
The Williston Basin, which spans parts of North Dakota, Montana, Saskatchewan, and Manitoba, is a major oil-producing region in North America. In order to transport crude oil and natural gas from the wells to refineries and other destinations, a vast pipeline infrastructure has been built in the area. The pipeline infrastructure in the Williston Basin consists of a network of pipelines that connect production sites to processing facilities, storage tanks, and major pipeline hubs
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/297_Blog_Keystone XL Pipeline Controversy and Wildlife Disaster From Trump's Green Light to Biden's Red Light on the 15 Billion Project.jpg)
The pipeline industry in the USA faced and still faces a range of regulatory challenges, including permitting delays, environmental requirements, and public opposition to pipeline projects. In recent years, pipeline projects like the Keystone XL and Dakota Access pipelines had legal and regulatory obstacles that delayed or canceled their construction. Keystone XL Pipeline, proposed by TransCanada in 2008, aimed to transport crude oil from Canada (around Calgary and Edmonton) to refineries on the Gulf Coast (Port Arthur). The project faced opposition from environmental groups and indigenous communities, who argued that it would contribute to climate change and pose a risk to water resources. In 2015, President Obama rejected the project, citing concerns about its environmental impact. However, in 2017, President Trump revived the project, leading to further legal challenges. In June 2021, U.S. President Joe Biden officially canceled the project on his first day in office.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/282_Blog_Renewable Natural Gas How RNG Changes the Industry.jpg)
The renewable natural gas (RNG) industry in the United States is showing promising signs of growth. As of 2019, the U.S. consumed 261 billion cubic feet (BCF) of RNG, primarily utilized by independent power producers, electric utilities, and various commercial and industrial entities. However, this figure represents only a small fraction of its potential. Research indicates that the U.S. could theoretically produce up to 2,200 BCF of RNG through anaerobic digestion alone, which would equate to about 11% of daily national natural gas consumption.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/295_Blog_Renewable Efforts Lag as Global Oil and Gas Demand Continues to Rise.jpg)
Recently, the progress toward an energy transition is hitting a snag. Sales of electric vehicles are decelerating, and the growth in wind and solar power needs to be keeping pace with expectations. To make matters more challenging, electricity prices are climbing when they were expected to fall. Amidst these setbacks, the oil and gas sectors are proving resilient. According to BP's latest energy outlook, not only are these energy mainstays here to stay, but their demand is expected to remain relatively high even after reaching a peak. Interestingly, BP forecasts that oil demand will reach its zenith next year, marking a critical moment in energy consumption trends. This isn't the first time BP has projected a peak in oil demand. Back in 2019, their review anticipated a decline in demand growth, but the prediction fell flat. Instead, oil demand surged to unprecedented levels following the end of the global pandemic lockdowns, defying previous forecasts and underscoring the enduring dominance of traditional energy sources in the global market.