Chord Energy to acquire Williston Basin assets from XTO Energy for $375m
Chord Energy Corporation, a Nasdaq-listed exploration and production company, has signed an all-cash deal worth $375 million with XTO Energy ExxonMobil Inc. and affiliates, which are subsidiaries of ExxonMobil, to acquire certain assets in the Williston Basin.
Under this agreement, Chord Energy will gain control over nearly 62,000 net acres, of which approximately 77% remain undeveloped. These assets encompass a near-term development program and boast an impressive average 8/8ths net revenue interest of 82%.
The acquisition provides Chord Energy with an estimated 123 net 10,000-foot equivalent locations, with around 77 of them being operated by the company. These holdings include Chord Energy-operated wells, as well as newly acquired drilling and support units (DSUs) that are predominantly untapped.
Chord Energy benefits from an approximate 65% average operated working interest in these DSUs. Moreover, the agreement includes royalty interests in specific DSUs. This arrangement empowers Chord Energy to convert six pre-acquisition 2-mile DSUs into 3-mile DSUs, enhancing the potential of these assets.
The acreage associated with the deal currently boasts a high-margin production level surpassing 6,000 barrels of oil equivalent per day. Among this production, nearly 62% comprises oil, and it demonstrates a low base decline rate of approximately 23%. Furthermore, the acreage is fully held by production.
Danny Brown — Chord Energy President and CEO said: “The acquired assets are an excellent strategic and operational fit to Chord’s premier Williston Basin acreage position.
“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.
“The transaction creates significant accretion for shareholders across all metrics, while maintaining pro forma leverage below our target.”
Subject to customary conditions, the deal is likely to close at the end of next month.