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SilverBow Resources (NYSE:SBOW) said Monday it agreed to acquire Chesapeake Energy’s (NASDAQ:CHK) oil and gas assets in south Texas for $700M, which Chesapeake said brings the total proceeds from its Eagle Ford exit to more than $3.5B.
The deal includes ~42K net acres and 540 wells in the condensate rich portion of the Eagle Ford located in Dimmit and Webb counties, which averaged net production of 29K boe/day in Q2.
SilverBow (SBOW) said it expects the deal will raise its Q4 net production to 87K-99K boe/day (~50% oil and natural gas liquids) and increase cash flow in 2024 by more than 80%, driving material accretion to both cash flow per share and free cash flow per share.
SilverBow (SBOW) said it will pay $650M at closing and $50M within one year of closing, plus an additional $25M contingent payment if WTI oil prices average $75-$80/bbl or $50M if prices average above $80 in the year following the close.
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