Chord Energy Acquires Williston Basin Assets from Exxon Mobil's XTO Unit

Chord Energy Strengthens Williston Basin Position with XTO Energy Asset Acquisition

Chord Energy Corporation (CHRD) announced a definitive agreement to acquire significant Williston Basin assets from Exxon Mobil Corporation's (XOM) XTO Energy Inc. subsidiary for $550 million in an all-cash transaction. This strategic acquisition is set to bolster Chord Energy's operational footprint and inventory depth within the premier shale basin. The transaction has an effective date of September 1, 2025, and is expected to close by the end of 2025.

Transaction Details and Operational Impact

The acquisition encompasses 48,000 net acres in the core Williston Basin, where Chord Energy already holds an 86% operated working interest. A crucial aspect of this deal is that the acreage is 100% held by production, ensuring immediate contribution to Chord's output. The acquired assets are projected to add approximately 9,000 barrels of oil equivalent per day (boe/d) to Chord's production, with oil constituting 78% of this volume. Furthermore, the assets include 90 net drilling locations, many of which overlap with Chord's existing operations. This contiguous acreage position is expected to facilitate long-lateral drilling, a strategy that enhances efficiency, improves well productivity, and reduces the cost of production. The assets boast a low average NYMEX WTI breakeven cost in the $40s per barrel range, making them competitive for capital deployment even during periods of commodity price volatility and reducing the overall breakeven cost of Chord’s portfolio. The acquired production assets are characterized by a projected low base decline rate of approximately 23%.

Strategic Rationale and Financial Implications

For Chord Energy, this acquisition is anticipated to be immediately accretive across key financial metrics, including cash flow, free cash flow, and net asset value, ultimately driving improved shareholder returns. The company projects post-transaction adjusted net leverage to be between 0.5x and 0.6x, with a target to return below 0.5x around mid-2026. This move aligns with Chord’s disciplined capital allocation strategy and its commitment to sustainable free cash flow generation. Piper Sandler analysts affirmed their positive outlook on Chord Energy, raising their price target to $169.00 from $166.00 and maintaining an Overweight rating. They highlighted the low-decline production and the favorable implied valuation of undeveloped locations, noting Chord is paying over $300 million for the proved developed producing (PDP) assets, which translates to less than $3 million per undeveloped location with WTI breakeven in the $40s.

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

For Exxon Mobil, the divestment is consistent with its broader corporate strategy to streamline its unconventional portfolio and intensify its focus on higher-priority assets. This includes its extensive operations in the Permian Basin and its expanding global Liquefied Natural Gas (LNG) ventures. The sale of these Williston Basin assets complements previous divestitures, such as the reported sale of older Permian assets to Hilcorp Energy for approximately $1 billion, underscoring Exxon's strategic pivot towards optimizing its asset base for maximum profitability and growth in key areas.

Broader Market Context and Future Outlook

This transaction underscores the ongoing trend of consolidation within the U.S. shale sector. As prime drilling locations become scarcer, companies like Chord Energy are actively seeking to secure high-quality acreage to enhance operational efficiencies and ensure long-term production stability. This aligns with a broader industry dynamic where strategic acquisitions are being used to optimize existing assets rather than merely expanding portfolios. The $550 million deal, while smaller in scale compared to some of the mega-mergers seen in 2024 (e.g., ConocoPhillips' $22.5 billion acquisition of Marathon Oil or Chord Energy's own $3.8 billion acquisition of Enerplus), represents a targeted maneuver to deepen inventory in a core operating area.

Looking ahead, the successful integration of these assets will be a key focus for Chord Energy. The company’s ability to execute its long-lateral drilling strategy and maintain its low breakeven costs will be critical in realizing the full value of this acquisition. With the transaction expected to close by year-end 2025, investors will be closely watching Chord’s progress toward its leverage reduction targets and its continued commitment to shareholder returns, particularly given its framework for distributing free cash flow based on leverage levels. For Exxon Mobil, the ongoing portfolio optimization is expected to further enhance its financial performance, as evidenced by its reported $7.1 billion in GAAP earnings and $11.5 billion in cash flow from operations in Q2 2025, and its commitment to significant share repurchases. The transaction reflects a calculated move by both entities to enhance their respective strategic positions within the evolving energy landscape.