Asset/portfolio management

Chord Energy Snaps Up Williston Basin Assets for $375 Million

The deal with XTO Energy adds about 62,000 net acres to Chord’s inventory.

Chord Energy has added about 62,000 net acres spread across 5 counties in North Dakota to its inventory.
Source: Einar Aslaksen/Equinor

While the M&A spotlight continues to shine on the prolific Permian Basin sprawled across western Texas and southeastern New Mexico, the Williston Basin of Montana and the Dakotas shimmers with consolidation opportunities as shale producers look to add more reserves to their inventory.

US independent Chord Energy recently announced the acquisition of about 62,000 net acres in the Williston Basin from XTO Energy for total cash consideration of $375 million.

"The acquired assets are an excellent strategic and operational fit to Chord's premier Williston Basin acreage position," said Danny Brown, Chord's president and chief executive. "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.”

According to Enverus, the assets are in the North Dakota counties of McKenzie, Williams, Mountrail, Divide, and Burke and are within or adjacent to Chord’s near-term development program.

Of the acreage acquired in the deal, about 77% of it is undeveloped and there are 123 estimated net 10,000-foot equivalent locations, a new largely undeveloped drilling spacing unit (DSU), and a number of locations that are already operated by Chord.

The assets to be divested currently produce 6,000 BOE/D (62% oil), with the acreage 100% held by production, according to Chord. The position will allow Chord to convert six preacquisition DSUs to 3-mile DSUs.

Chord Energy is the result of a 2022 merger of Williston Basin producers Oasis Petroleum and Whiting Petroleum in a $6 billion transaction. The Houston-based company currently holds about 963,000 net acres across the Williston Basin, producing about 165,000 BOE/D in the first quarter of 2023.

The company said it expects to fund the acquisition with cash on hand, which was $592 million as of 31 March. The closing is expected to occur at the end of June 2023 and is subject to customary closing conditions.