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SilverBow Successfully Completes $700MM Purchase of Chesapeake’s South Texas Holdings
12/07/2023
SilverBow Resources Inc. finished buying Chesapeake Energy Corp.'s oil and gas areas in South Texas. They agreed to this $700 million deal back in August.
The deal included SilverBow paying $650 million in cash when the deal was closed. They will also pay another $50 million in cash a year later, with some usual changes in the amount. Chesapeake might get an additional $50 million later, depending on the prices of oil and gas in the future.
SilverBow paid for this big purchase with the money they had, by borrowing from their credit line, and by selling more of their second lien notes.
“Our strategy of growth and acquisitions has led us to a stronger financial position, a more diverse mix of commodities, and a collection of prime locations in a strategically beneficial basin. The assets we’ve acquired from Chesapeake significantly add to our ability to choose the best projects for capital investment and offer immediate competition for capital.”
- Sean Woolverton, the CEO of SilverBow
Expectations
- The company anticipates that over 40% of its full-year production will be oil and natural gas liquids.
- For 2024, SilverBow is planning to enhance its capital program to develop the Chesapeake assets. This includes operating two rigs on liquid-rich fields and one on dry gas fields, as stated by Woolverton.
- The company does not plan any additional capital expenditures specifically for these newly acquired assets.
- SilverBow expects a significant increase in oil production in 2024, projecting about a 70% rise from the previous year, aiming for an average output of 25,000 barrels per day.
About SilverBow Resources Inc.
SilverBow Resources is an independent company that explores and produces oil and gas. They focus on the Eagle Ford Shale and Austin Chalk regions in South Texas. With around 30 years of experience in these areas, SilverBow aims to create value for its shareholders through efficient operations, strategic acquisitions of high-return inventory, and generating sustainable free cash flow. The company manages approximately 220,000 net acres of land, which consist of low-risk development locations and a balanced mix of commodities.
About Chesapeake Energy Corporation
Chesapeake Energy Corporation, based in Oklahoma City, is a team of dedicated and innovative employees committed to discovering and responsibly developing leading oil and gas resources across the United States. They have set an ambitious goal to reach net zero greenhouse gas (GHG) emissions (Scope 1 and Scope 2) by 2035. Chesapeake Energy is dedicated to providing affordable, reliable, and lower carbon energy in a safe manner.
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