Chord Energy Acquires $550 Million Williston Basin Assets from Exxon’s XTO

What's Happening?

Chord Energy has announced a $550 million agreement to purchase assets in the Williston Basin from Exxon Mobil's XTO Energy. This acquisition includes 48,000 net acres in the core of the Williston Basin, with an 86% operated working interest and 100% held by production. The assets are expected to add 90 net drilling locations and contribute approximately 9,000 barrels of oil equivalent per day (boed) of production, with 78% of this being oil. Danny Brown, Chord's president and CEO, emphasized the strategic overlap with Chord's existing footprint, which will facilitate long-lateral development. The transaction is set to be effective from September 1 and is anticipated to close by the end of the year.

Why It's Important?

This acquisition is significant for Chord Energy as it enhances its presence in one of the most productive regions of the Williston Basin. The assets have a low breakeven cost, which is expected to lower Chord's overall portfolio breakeven levels, thereby improving operating margins on producing wells. The deal is projected to create substantial accretion for shareholders across key metrics while maintaining pro forma leverage below the peer group. Additionally, Chord's shareholder return framework, which has already seen the repurchase of over 788,000 shares worth $83 million, indicates a strong commitment to distributing more than half of adjusted free cash flow to shareholders.

What's Next?

Following the closure of the transaction, Chord Energy anticipates maintaining net leverage between 0.5x and 0.6x, with a potential reduction to below 0.5x by mid-2026, contingent on commodity prices. The company plans to continue enhancing its drilling inventory and operating margins, leveraging the newly acquired assets. Stakeholders will be closely monitoring the integration of these assets and the impact on Chord's financial performance and shareholder returns.