Chord Energy’s subsidiary has signed an agreement to buy core acreage in the Williston Basin from Exxon Mobil’s subsidiary XTO Energy and affiliates, in a deal valued at $375m.
The acquisition comprises around 62,000 acres, of which 77% is undeveloped. The acreage is situated within, and adjacent to, Chord Energy’s near-term development programme.
The assets, which are 100% held by production, include 123 net 10,000ft locations, of which around 77 are operated, including interest in Chord operated wells.
The acquisition also includes interest in new largely undeveloped drilling spacing units (DSUs) as well as royalty interests in certain DSUs.
The acreage has a high-margin production of more than 6,000 barrels of oil equivalent per day, of which around 62% is oil.
Furthermore, it will enable the company to convert six pre-acquisition, two-mile DSUs into three-mile DSUs.
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Chord Energy president and CEO Danny Brown 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 closing conditions, the transaction is anticipated to be completed by the end of next month.
Chord Energy was formed last year through a $6bn combination transaction between Whiting Petroleum and Oasis Petroleum.
The combination created an oil producer with a significant Williston Basin acreage position with assets across about 972,000 acres.