Chord Energy Corp (CHRD) News & EventsCHRDChord Energy Corp

Chord Energy Sells Non-Operated Marcellus Assets to POSCO International for $550M

Chord Energy announced that one of its subsidiaries has entered into an agreement to sell its entire non-operated Marcellus position to POSCO International Corporation for total gross consideration of $550M. The transaction is expected to close in the Q4 subject to customary closing conditions. Transaction Highlights include: Divesting non-operated Marcellus position consisting of approximately 32k net acres and trailing 12-month, or TTM, production of approximately 121 MMcfpd. Volumes consist of 100% residue gas with no NGLs; Transaction is highly accretive across key metrics: Transaction value represents approximately 6x Adjusted EBITDA based on gross proceeds of $550M and $3.50/MMBtu Henry Hub; Chord received a $55M deposit with the remaining consideration payable at closing. Effective date for the transaction is July 1; Chord's net leverage is expected to decline further as a result of the divestiture, and remain well below peer levels; Proceeds will be deployed over time in a manner consistent with the Company's disciplined capital allocation framework. Following the transaction, Chord's portfolio will be focused exclusively in the Williston Basin, where the Company expects to continue driving significant value creation through its size, scale and robust inventory life. Chord expects to update guidance in conjunction with its Q3 earnings release in November. On a pro forma basis, Chord expects the following impacts to its post-divestiture key metrics: Oil weighting would increase by approximately 4 to 5 percentage points; given stronger gas realizations in the Marcellus, gas realizations would decrease by approximately 16 to 30 percentage points; due to higher oil weighting in the Williston Basin, LOE would increase by approximately 70c-80c per Boe; cash GPT3 would decrease by 20c-25c per Boe; production taxes would increase by 0.15%-45% of oil, NGL, and natural gas sales; and CapEx would decrease by approximately $25M annually. Moelis & Company and RBC Capital Markets acted as strategic and financial advisors to Chord Energy, and Orrick, Herrington & Sutcliffe acted as legal advisor. Bank of America acted as strategic and financial advisor to Chord's counterparty, POSCO International Corporation, and DLA Piper acted as legal advisor.