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Chord Energy to Sell Marcellus Gas Assets to POSCO for $550 Million

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Chord Energy (CHRD) said on Wednesday it has agreed to sell its entire non-operated position in the Marcellus shale gas basin to POSCO International for $550 million, as the US oil producer focuses its portfolio on the Williston Basin.

The transaction, projected to close in Q4, includes about 32,000 net acres in the Marcellus and trailing 12-month production of about 121 million cubic feet per day.

Chord Energy assets produce entirely residue natural gas and have no natural gas liquids. The energy firm said it received a $55 million deposit, with the remaining proceeds due at closing. The transaction has an effective date of July 1.

The sale values the assets at about six times adjusted EBITDA based on the $550 million gross proceeds and a Henry Hub natural gas price of $3.50 per million British thermal units.

The divestiture is expected to further reduce Chord's net leverage, the company said, adding that it would remain well below peer levels.

The oil producer said it would deploy proceeds from the sale over time, in line with its capital allocation strategy.

After the transaction closes, Chord's portfolio will focus on the Williston Basin, a major oil-producing region spanning parts of North Dakota and Montana.

The divestiture is expected to increase Chord's oil weighting by about 4 to 5 percentage points. Gas realizations are projected to decline by about 16 to 30 percentage points, reflecting stronger gas realizations from the Marcellus assets.

Lease operating expenses are expected to rise by about $0.70 to $0.80 per barrel of oil equivalent because of the firm's higher oil weighting, while cash gathering, processing and transportation costs are set to decline by $0.20 to $0.25 per barrel of oil equivalent.

Production taxes are expected to increase by about 0.15% to 0.45% of oil, natural gas liquids and natural gas sales, while annual capital expenditure is set to fall by about $25 million.

Chord said it plans to update its guidance when it reports Q3 results in November.

Price: $149.61, Change: $-7.40, Percent Change: -4.71%

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