Chesapeake Energy Corp. has executed an agreement to sell its remaining assets in the Eagle Ford to SilverBow Resources Inc. for up to $750 million if contingency payment thresholds are met.
SilverBow said the “transformational” acquisition would add 87,000 boe/d to 99,000 boe/d, with 50% production oil and NGL. SilverBow will pay $650 million in upfront cash at closing, an additional $50 million in a deferred payment 12 months after close and a possible $50 million contingency payment based on future commodity prices.
In second quarter 2023, the average daily production from these properties was approximately 29,000 boe , which generated approximately $50 million of EBITDAX, according to the release.LLC, said the potential $750 million headline price tag comes in “above our expectations of $500.0-$600.0 million.” Based on the headline price tag and total production, the transaction is valued at $24,138 per flowing boe/d, Sorbara said. In SilverBow’s press release, the E&P estimates the PDP at $850 million based on Aug. 4 strip prices.
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