SilverBow Resources has acquired oil and gas assets in South Texas, US, from Chesapeake Energy in a deal worth $700m.

As part of the agreement, which was signed between the parties in August 2023, SilverBow acquired Chesapeake’s 42,000 net acres and around 540 wells in the condensate-rich portion of its Eagle Ford basin in Dimmit and Webb counties, South Texas, as well as related property, plants and equipment.

During Q3 2023, these properties reported average net daily production of approximately 29,000boe.

The deal consideration includes an upfront cash payment of $650m, which is paid at closing of the transaction, and a deferred cash payment of $50m due 12 months after the deal has closed.

Furthermore, Chesapeake could receive an additional contingent cash consideration of up to $50m based on future commodity prices.

SilverBow CEO Sean Woolverton said: “We are excited to close the Chesapeake Transaction, which materially increases our scale in South Texas and transforms SilverBow into the largest public pure-play Eagle Ford operator.

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“Our differentiated growth and acquisition strategy has positioned us with a stronger balance sheet, a broader commodity mix and a portfolio of locations across a single, geographically advantaged basin. The acquired Chesapeake assets further enhance our optionality to continue allocating capital to our highest return projects and will immediately compete for capital.”

In 2024, SilverBow Resources anticipates a capital expenditures budget of $550–580m to support a three-rig drilling programme.

It also expects a preliminary gas production outlook of 551,000–611,000 million cubic feet equivalent per day in the South Texas Eagle Ford next year.