Chord Announces ‘Strategic Acquisition of Williston Basin Assets’

Chord Energy Corporation announced a “strategic acquisition of Williston Basin assets” in a statement posted on its website recently.

In the statement, Chord said a wholly owned subsidiary of the company has entered into a definitive agreement to acquire assets in the Williston Basin from XTO Energy Inc. and affiliates for a total cash consideration of $550 million, subject to customary purchase price adjustments.

The consideration is expected to be funded through a combination of cash on hand and borrowings, Chord noted in the statement, which highlighted that the effective date for the transaction is September 1, 2025, and that the deal is expected to close by year-end.

Chord outlined in the statement that the deal includes 48,000 net acres in the Williston core, noting that “90 net 10,000 foot equivalent locations (72 net operated) extend Chord’s inventory life”. Pointing out “inventory quality” in the statement, Chord highlighted that “low average NYMEX WTI breakeven economics ($40s) compete at the front-end of Chord’s program and lower the weighted-average breakeven of Chord’s portfolio”. The company outlined that the deal is “expected to be accretive to all key metrics including cash flow, free cash flow and NAV in both near and long-term”.

“We are excited to announce the acquisition of these high-quality assets,” Danny Brown, Chord Energy’s President and Chief Executive Officer, said in the statement.

“The acquired assets are in one of the best areas of the Williston Basin and have significant overlap with Chord’s existing footprint, setting the stage for long-lateral development. The assets have a low average NYMEX WTI breakeven and are immediately competitive for capital,” he added.

“We expect that the transaction will create significant accretion for shareholders across all key metrics, while maintaining pro forma leverage below the peer group and supporting sustainable FCF generation and return of capital,” he continued.

“I’m thankful for the hard work of all those involved in this transaction and look forward to Chord operating this asset in a safe and sustainable manner while continuing our strong relationship with the Three Affiliated Tribes on the Fort Berthold Indian Reservation,” he went on to state.

Brown said in the statement that this deal is “consistent” with the company’s “strategic objectives” and added that the company “look[s] forward to incorporating the assets into the Chord portfolio given our established history of successful integration and execution”.

“Chord has demonstrated an impressive ability to improve economics by optimizing spacing and lateral length while driving efficiencies through the base business. Our track record of exceeding production expectations while lowering capital and improving margins has supported sustainable free cash flow and high return of capital,” Brown stated.

“Chord has lengthened its inventory runway through adopting new technologies, improving operational efficiency and strategic M&A. We remain focused as an organization on disciplined capital allocation, driving continuous improvement through the business, and delivering even better efficiency going forward,” he went on to note.

XTO Energy highlights on its website that it is an ExxonMobil subsidiary. Rigzone has contacted ExxonMobil for comment on Chord’s statement. At the time of writing, Exxon has not responded to Rigzone.

In a statement posted on its site in May last year, Chord announced that it and Enerplus had completed a combination, “creating [a] premier Williston-focused E&P company”.

“The arrangement was approved by Chord and Enerplus shareholders on May 14, 2024 and May 24, 2024, respectively, and received the approval of the Court of King’s Bench of Alberta on May 28, 2024,” Chord said in that statement.

Brown went on to say in that statement, “we are excited to complete the combination with Enerplus, creating a premier Williston Basin operator with enhanced scale, significant low-cost inventory, financial strength, and peer-leading shareholder returns”.

“We are extremely grateful for the hard work, dedication, and positive attitude of both the Chord and Enerplus teams, who have been working diligently to help us realize the full potential of this combination,” he added.

“We are leveraging best practices from both companies to create a stronger, more efficient organization and, at this point, see over $200 million of annual synergies vs. our original estimate of $150 million,” he continued.

XTO states on its website that it is a leading oil and natural gas producer in the United States with expertise in developing tight gas, shale gas, and unconventional oil resources. The company notes on its site that it operates “throughout the United States, from the Permian Basin and the Bakken to Appalachia”, adding that it holds “more than 9.5 million acres with a total resource base of approximately 18.5 billion oil equivalent barrels”. The company also provides operational support for unconventional resource development in Argentina, according to its site.

Chord describes itself on its site as a scaled unconventional U.S. oil producer with a premier Williston Basin acreage position.

“Led by a management team with extensive industry experience, Chord acquires, exploits, develops, and explores for crude oil, natural gas, and natural gas liquids, helping to supply the energy that powers and improves daily life around the world,” the company states on its site.

To contact the author, email andreas.exarheas@rigzone.com