Chord Energy Acquires XTO Energy Assets in Williston Basin

Chord Energy Corporation (NASDAQ: CHRD) announced a definitive agreement to acquire Williston Basin assets from XTO Energy Inc., a subsidiary of ExxonMobil Corporation (NYSE: XOM), for a cash consideration of $550 million. This strategic transaction is designed to substantially expand Chord Energy's operational footprint and extend its inventory life within the prolific Williston Basin.

The Event in Detail

The all-cash acquisition involves 48,000 net acres in the core Williston Basin, characterized by an 86% operated working interest and 100% held by production. The deal includes 90 net 10,000-foot equivalent drilling locations, with 72 net operated sites, significantly extending Chord Energy's inventory life. These assets are projected to contribute approximately 9,000 barrels of oil equivalent per day (boepd) to Chord's production, with a high oil cut of 78% and a low base decline rate of about 23%.

Critically, the acquired assets boast low breakeven costs in the $40 per barrel range (NYMEX WTI), which is expected to lower the weighted-average breakeven of Chord's overall portfolio. The transaction has an effective date of September 1, 2025, and is anticipated to close by year-end 2025. Chord Energy plans to fund the acquisition through a combination of cash on hand and borrowings, recently upsizing a private placement of senior unsecured notes from $500 million to $750 million (6.000% senior notes due 2030) to facilitate the deal and other corporate purposes.

Analysis of Market Reaction

Chord Energy's leadership expressed strong optimism regarding the acquisition. Danny Brown, President and CEO of Chord Energy, stated:

"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."

The company anticipates the transaction will be immediately accretive across key financial metrics, including cash flow, free cash flow, and net asset value. Post-transaction, Chord Energy expects its adjusted net leverage to be approximately 0.5x to 0.6x, with a target to return below 0.5x around mid-2026. This aligns with Chord's robust return of capital framework, which dictates distributing 50% or more of adjusted free cash flow when leverage is between 0.5x and 1.0x, and 75% or more when leverage falls below 0.5x. In line with this commitment, the company repurchased 788,444 shares totaling $83 million in the third quarter of 2025.

For ExxonMobil, this divestment aligns with its broader strategy of shedding non-core, conventional, and lower-return assets to concentrate on high-margin, high-growth projects, particularly within its unconventional portfolio like the Permian Basin and Guyana. This asset optimization helps free up capital for other strategic investments and reinforces their focus on projects with multi-decade potential.

Broader Context & Implications

This acquisition by Chord Energy underscores a continuing trend of consolidation and strategic asset optimization within the oil and gas sector, particularly in the Williston Basin. Companies are increasingly focused on acquiring high-quality, producing assets with low breakeven costs to enhance capital efficiency and build resilience against volatile commodity prices.

Chord Energy's ability to leverage the contiguous nature of the acquired acreage with its existing operations will facilitate the development of long-lateral wells (3- and 4-mile laterals). This technology is expected to drive efficiencies, improve well productivity, and lower production costs, a strategy that has proven successful in previous integrations, such as the company's acquisition of Enerplus.

This move also highlights ExxonMobil's disciplined portfolio management, exemplified by its $64.5 billion acquisition of Pioneer Natural Resources in 2024 to expand its Permian Basin holdings, while strategically divesting other properties. The broader market implication points to an industry-wide rationalization as energy companies prioritize high-value assets and disciplined capital allocation in an evolving landscape.

Looking Ahead

Investors will be monitoring Chord Energy's integration of these new assets, with particular attention to how the company realizes anticipated synergies, boosts production volumes, and manages its leverage profile. The firm's continued adherence to its return of capital framework, supported by sustainable free cash flow generation, will be a key determinant of shareholder value. Furthermore, the transaction may signal further consolidation activities within the independent oil and gas exploration and production sector, as companies seek to strengthen their competitive positions and operational efficiencies in core basins.