Chord Energy Corp. has signed an agreement to acquire hydrocarbon development areas in the Williston Basin owned by ExxonMobil Corp. for 375 million dollars.
The definitive agreement with XTO Energy Inc. and its subsidiaries, which are subsidiaries of ExxonMobil, adds about 62,000 net acres to Chord’s inventories, it said in a news release Monday. About 77 percent of the area to be transferred is undeveloped.
After the transaction closes, expected in June, the Houston-based exploration and production company would have 123 net locations equivalent to 10,000 square feet.
The assets to be divested can currently produce 6,000 barrels of oil equivalent per day (Mboepd), according to the announcement.
“The acquired assets are an excellent strategic and operational fit to Chord’s core Williston Basin acreage position,” Chord President and CEO Danny Brown said in the statement. “These low-cost, premium assets are highly competitive with our existing portfolio and further expand our inventory runway.”
Customary closing conditions remain before the deal can be completed, Chord said.
The purchase follows the acquisition by Oasis Petroleum Inc., which merged with Whiting Petroleum Corp. 2022 to form Chord, from the oil and gas assets of Diamondback Energy Inc. in the Williston Basin.
The basin is estimated to contain 83 million barrels of oil and 351 billion cubic feet of gas in the states of Montana and North and South Dakota in medium undiscovered and technically recoverable resources in its Paleozoic strata, according to an assessment by the United States Geological Survey. Survey published on November 8, 2018.
Chord earlier this month said it was selling non-core, non-Williston assets for about $35 million. The transactions involving 1,100 Mboepd are expected to close in the second quarter of 2023.
The divestments allowed Chord to raise its production forecast for the year to 168.2 Mboepd, it said in its first-quarter earnings report on May 3.
The company produced 164.7 Mboepd between January and March, within Chord’s projection range, according to the earnings report. Chord reported net income of $297 million for the first quarter of 2023.
According to Monday’s announcement, it expects to meet payments for the acquisition of ExxonMobil’s assets through available cash, which stood at $592 million in March. Transaction value is subject to price adjustments.
Chord closed higher at $149.55 on the Nasdaq Monday compared to $146.97 at last week’s close.
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