Chord Energy to Acquire Williston Basin Assets From XTO Energy

Chord Energy Corporation CHRD, a leading exploration and production firm in the United States, stated that it will acquire Williston Basin assets from a subsidiary of Exxon Mobil Corporation, XTO Energy. The acquisition will take place in an all-cash transaction of $550 million. According to Chord Energy, which operates extensively in the Williston Basin of the United States, the acquisition will further strengthen its presence in the premier shale basin.Operational Synergies and Inventory ExpansionThe transaction involves 48,000 net acres in the Williston Basin, where CHRD has an 86% operated working interest. Furthermore, the acreage is 100% held by production, which implies that it is already producing oil and gas. The acquired assets are expected to enhance Chord’s inventory position with 90 net drilling sites, many of which overlap with its existing operations. This offers a contiguous acreage position, which allows for long-lateral drilling, a strategy that drives efficiency, improves well productivity and lowers cost of production. The assets have a forecasted decline rate of approximately 23%.Expected Production & Breakeven EconomicsThe acquired assets are also expected to contribute 9,000 barrels of oil equivalent per dayto the company’s production, consisting of 78% oil. The company noted that the acquired assets have breakeven costs in the $40 per barrel range. This implies that these assets can sustain operations even during periods of low commodity prices, making them immediately compete for capital. The transaction will also reduce the overall breakeven cost for the company’s asset portfolio.Leverage Ratio and Shareholder ReturnsChord Energy also highlighted that the acquisition is anticipated to generate improved shareholder returns and be immediately accretive across key financial metrics. Furthermore, these assets are expected to generate sustainable free cash flow for the company, facilitating improved capital returns to shareholders. The company also expects to maintain debt levels lower than those of its peers. The deal is expected to close by the end of 2025. Upon closing, the company’s leverage is expected to range between 0.5x and 0.6x. CHRD plans to return to a 0.5x leverage ratio by 2026, depending on the commodity pricing scenario.Chord Energy also reiterated its shareholder return policy, under which the company returns approximately 50% of its adjusted free cash flow while maintaining leverage between 0.5x and 1.0x. When leverage is below 0.5x, the company intends to return nearly 75% of its adjusted free cash flow. In the third quarter, the company rewarded shareholders through buybacks worth $83 million.CHRD’s Zacks Rank & Key PicksCurrently, CHRD carries a Zacks Rank #3 (Hold).Some better-ranked stocks from the energy sector are Repsol S.A. REPYY, Antero Midstream Corporation AM and Galp Energia SGPS SA GLPEY. While Repsol sports a Zacks Rank #1 (Strong Buy), Antero Midstream and Galp Energia carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks Rank #1 stocks here.Repsol is a global multi-energy company, involved in exploration and production activities as well as refining and marketing petroleum products. The company is also actively involved in transitioning toward cleaner and more sustainable energy solutions. This suggests that Repsol is positioning itself in line with global energy transition needs.Antero Midstream generates stable cash flow by providing midstream services under long-term contracts with Antero Resources. The company’s higher dividend yield, compared to its sub-industry peers, makes it an attractive choice for investors who seek consistent returns.Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company’s oil exploration efforts have yielded positive results, particularly the Mopane discovery in the Orange Basin, offshore Namibia. After the initial exploration phase, Galp estimated that the Mopane prospect could hold nearly 10 billion barrels of oil. This discovery allows Galp to diversify its global presence, with the potential to become a significant oil producer in the region.Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Antero Midstream Corporation (AM): Free Stock Analysis Report Repsol SA (REPYY): Free Stock Analysis Report Galp Energia SGPS SA (GLPEY): Free Stock Analysis Report Chord Energy Corporation (CHRD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks