Chord Energy Expands Footprint with Strategic Williston Basin Acquisition

Chord Energy Corporation, listed on NASDAQ under the symbol CHRD, has made headlines with its latest strategic move in the oil sector. The company, which is primarily focused on exploring and producing energy resources, has entered into a definitive agreement to acquire assets located in the coveted Williston Basin from XTO Energy Inc. and its affiliates, which are subsidiaries of the global energy giant Exxon Mobil Corporation. This acquisition is valued at $550 million, a deal set to be finalized by the end of this year, pending customary adjustments.

Enhancing Presence in the Williston Basin

With this acquisition, Chord Energy will gain 48,000 net acres in the core of the Williston Basin. This region is known for its rich energy deposits and represents a significant addition to Chord’s operational footprint. Notably, the terms of the deal indicate that Chord will maintain an 86% operated working interest and an impressive 82% net revenue interest for the acquired properties. This level of control allows Chord to more effectively manage and optimize the output from these resources.

Technical Details of the Acquisition

The acquired land features a deep inventory of approximately 90 net drilling locations, which are critical in extending Chord's asset life. Among these locations, 72 are net operated, meaning they will directly enhance the company's production capabilities. The essence of this acquisition revolves around the synergy it creates with Chord's existing operational base, significantly increasing the potential for long-lateral development—a key strategy that plays to Chord’s strengths in optimizing spacing and leveraging technological advancements.

According to industry analysts, the low average WYNYMEX WTI breakeven prices in this region, estimated to be in the $40s range, suggest that the investment is likely to pay off. These figures are competitive within the current market framework, enhancing the overall financial viability of Chord’s portfolio.

Expected Production and Financial Upsides

Upon completion of the deal, analysts expect a near-term production of around 9 MBoepd (with approximately 78% of that being oil), along with a promising low decline rate of about 23%. Such production forecasts indicate substantial opportunities for improving operating margins, particularly as Chord integrates these new assets into its portfolio.

The acquisition is projected to positively impact several critical financial aspects for Chord Energy, including free cash flow and net asset value. The adjusted net leverage following the transaction is expected to remain in a conservative range of approximately 0.5x to 0.6x, aligning with the company's goals of maintaining fiscal responsibility while driving growth.

Leadership Perspective

Danny Brown, the President and CEO of Chord Energy, expressed enthusiasm regarding the acquisition, emphasizing the strategic fit within Chord's existing operations in the Williston Basin. He noted that the overlap with existing assets creates a platform for enhanced operational efficiency, sustainable development, and ultimately, shareholder value. This transaction exemplifies Chord's strategic aim in pursuing high-quality assets that promise both immediate and long-term benefits. Brown appreciated the efforts of the entire team involved in this significant transaction and reiterated the company's commitment to operating these assets responsibly and in alignment with local community interests, particularly with the Three Affiliated Tribes.

Looking Ahead

The effective date for the acquisition is set for September 1, 2025, and the integration process is expected to unfold swiftly post-closure. As part of its commitment to returning capital to its shareholders, Chord anticipates distributing over 50% of adjusted free cash flow once the transaction stabilizes, reaffirming its pledge to maintain a strong financial foundation while rewarding stakeholder confidence.

In conclusion, this acquisition positions Chord Energy favorably within a competitive marketplace, promising growth and enhancing its already robust operational framework. As the company continues to adopt innovative measures and undergoes strategic acquisitions, the future looks bright for Chord and its shareholders in the rapidly evolving energy landscape.