Chord Energy acquires Williston basin assets for $375 million

(WO) – Chord Energy Corporation has entered into a definitive agreement to acquire assets in the Williston basin from XTO Energy Inc. and affiliates, subsidiaries of Exxon Mobil Corporation, for total cash consideration of $375 million. The consideration is expected to be funded with cash on hand, which was $592 million, as of March 31, 2023.   

Acquiring core acreage in Williston basin includes roughly 62,000 net acres (~77% undeveloped, 82% average 8/8ths net revenue interest) within and adjacent to near-term development program. It also includes 123 estimated net 10,000 foot equivalent locations (~77 operated), including interest in Chord operated wells and new largely undeveloped DSUs (average operated working interest of ~65%). The acquisition also includes royalty interests in certain DSUs.

In addition, the deal includes current high-margin production of over 6 Mboed (~62% oil) with a low base decline rate of approximately 23%. The position allows Chord to convert 6 pre-acquisition 2-mile DSUs to 3-mile DSUs.

Acreage is 100% held by production, and high-return inventory additions are expected to extend Chord's overall inventory life and lower weighted average break-evens of portfolio.

"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,” said Danny Brown, Chord's President and Chief Executive Officer.