Williston Basin pure-play Chord Energy Corp. has agreed to acquire a package of assets from ExxonMobil subsidiary XTO Energy Inc. in a cash transaction valued at $375 million.
The assets span about 62,000 net acres and include “123 estimated net 10,000 foot equivalent locations,” said management of Houston-based Chord. The XTO assets currently are producing more than 6,000 boe/d (62% oil), with the acreage 100% held by production. XTO specializes in developing tight gas, shale gas and unconventional onshore resources, primarily in the Lower 48.
“The acquired assets are an excellent strategic and operational fit to Chord’s premier Williston Basin acreage position,” said Chord CEO Danny Brown. “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.”
About 77 of the locations are operated, the company said. The acquisition would include interest in Chord-operated wells and new, largely undeveloped drilling spacing units (DSU), as well as royalty interest in certain DSUs.
Brown added, “The transaction creates significant accretion for shareholders across all metrics, while maintaining pro forma leverage below our target.”
The transaction is slated to close at the end of June, according to Chord, which was formed through the 2022 merger of Bakken Shale-focused independents Whiting Petroleum Corp. and Oasis Petroleum Inc.
North Dakota’s natural gas production showed flat sequential growth in March, the latest month for which official figures are available, amid stubbornly low prices driven by a gas supply glut in the Midwest region. Natural gas storage levels in the Midwest stood at 29.4% above the five-year historical average as of Thursday (May 18), according to the Energy Information Administration.
Chord, for its part, is forecasting full-year natural gas production of 216-220.5 MMcf/d in 2023, versus output of 221.4 MMcf/d recorded during the first quarter.
