Chesapeake Energy’s $700 million sale of its assets in the Eagle Ford play of South Texas won’t be finalized until later this year.
The sale was to SilverBow Resources, Inc., a firm that indicated following Monday’s announcement that the acquisition will add $825 to $925 million of pro forma in the next 12 months EBITDA. Free cash flow in 2024 is predicted to increase by more than 80% as a result of Chesapeake’s sale to SilverBow. The company also anticipates increased fourth quarter 2023 net production to nearly 99,000 Boe/d.
SilverBow made the purchase with cash on hand, according to its announcement.
“The Chesapeake Transaction transforms SilverBow into the largest public pure-play Eagle Ford operator,” said Sean Woolverton, SilverBow’s Chief Executive Officer.
“This acquisition advances all our long-term strategic objectives, by materially increasing our scale, enhancing our decade-plus high-return inventory, improving our capital efficiency and providing balanced commodity exposure, all while maintaining a strong balance sheet.”
For Woolverton, it was a get-acquainted time perhaps with Chesapeake Energy leaders. He worked for Chesapeake Energy from 2007 to 2013 and at one point, was Vice President of its Southern Appalachia business unit.
His company’s acquisition will add 42,000 acres in Dimmit and Webb counties, a region that is described as a highly prolific, liquids-heavy window of South Texas. It also means 300 more high-confidence drilling locations acoss the Austin Chalk and Eagle Ford formations for SilverBow.
Upon closing, it will mark SilverBow’s 8th acquisition in the past two years totaling nearly $1.4 billion.
