Chesapeake announces sale of final Eagle Ford package for $700M

Chesapeake (CHK) announced that it has executed an agreement to sell its remaining Eagle Ford assets to SilverBow Resources (SBOW) for $700M, bringing the total proceeds from its Eagle Ford exit to more than $3.5B. Chesapeake has agreed to sell approximately 42,000 net acres and approximately 540 wells in the condensate rich portion of its Eagle Ford asset located in Dimmit and Webb counties, along with related property, plant and equipment. During the second quarter of 2023, average net daily production from these properties was approximately 29,000 barrels of oil equivalent, or boe, which generated approximately $50M of EBITDAX. As of December 31, 2022, net proved reserves associated with these properties were approximately 124M barrels of oil equivalent, or mmboe. Chesapeake expects the transaction will close, subject to certain regulatory approvals and consents, in 2023, with an effective transaction date of February 1. The company will receive $650M upon closing, subject to customary adjustments, with the final $50M installment paid one year from the closing date. SilverBow has also agreed to pay Chesapeake an additional contingent payment of $25M should oil prices average between $75 and $80 per barrel WTI NYMEX or $50M should WTI NYMEX prices average above $80 during the year following the close of the transaction, which could increase total proceeds of the deal to $750M. Chesapeake anticipates the proceeds will be available to further strengthen its balance sheet and for its share repurchase program.