Chord Energy Corp. has entered a deal to acquire hydrocarbon development areas in the Williston Basin owned by ExxonMobil Corp. for $375 million.
The definitive agreement with XTO Energy Inc. and affiliates, which are ExxonMobil subsidiaries, adds about 62,000 net acres to Chord’s inventories, it said in a press release Monday. Around 77 percent of the acreage to be transferred is undeveloped.
Upon the closure of the transaction, expected June, the Houston city-based exploration and production company would have 123 net 10,000-foot equivalent locations.
The assets to be divested currently can 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 premier Williston Basin acreage position”, Chord president and chief executive Danny Brown commented in the release. “These low-cost, tier-one assets are highly competitive with our existing portfolio and further extend our inventory runway”.
Customary closing conditions remain before the deal could be fulfilled, Chord said.
The purchase follows the acquisition by Oasis Petroleum Inc., which joined hands with Whiting Petroleum Corp. 2022 to form Chord, of Diamondback Energy Inc.’s oil and gas assets in the Williston Basin.
Spanning the states of Montana and North and South Dakota, the basin is estimated to hold 83 million barrels of oil and 351 billion cubic feet of gas in undiscovered, technically recoverable mean resources in its Paleozoic strata, according to an assessment by the United States Geological Survey published November 8, 2018.
Chord earlier this month said it was selling non-Williston, non-core assets for about $35 million. The transactions involving 1,100 Mboepd are projected to close the second quarter of 2023.
The divestments allowed Chord to raise forecast output for the year to as high as 168.2 Mboepd, it said in its earnings report for the first quarter released May 3.
The company produced 164.7 Mboepd in January-March, within the range of Chord’s projection, according to the results report. Chord logged $297 million in net income for the 2023 opening quarter.
It expects to fulfill payments for the acquisition of the ExxonMobil assets through cash on hand, which stood at $592 million as of March, according to Monday’s announcement. The value of the transaction is subject to price adjustments.
Chord closed higher at $149.55 on Nasdaq Monday compared to $146.97 in last week’s closing session.