American Oil and Gas Reporter - February 2022 - 18

IndustryDigest
premium Marcellus Shale drilling
locations in Northeast Pennsylvania.
Chesapeake adds that it expects the
transaction to close by the end of the
first quarter of 2022.
Among the highlights of the
transaction to which Chesapeake points
are that it:
· Increases the outlook for
cumulative five-year free cash flow to
more than $9 billion at late January's
commodity strip prices (with 75% of
the cash flow projected for 2022
coming from natural gas and 25%
coming from oil);
· Strengthens Chesapeake's
Marcellus position, growing premium
undeveloped locations by about 25%
and extending drilling inventory to more
than 15 years at current activity levels;
· Increases the company's pro
forma Marcellus production capacity by
as much as 200 million cubic feet of
natural gas a day; and
· Achieves estimated synergies of
$50 million-$70 million a year.
Chesapeake President and Chief
Executive Officer Nick Dell'Osso says
the transactions meet its acquisition
standards and help clarify its portfolio.
" We know the importance of scale and
the Chief and Tug Hill assets fit like a
glove with our existing position in the
northeast Marcellus Shale, " he relates.
" The acquisition checks all the boxes: it
lengthens our premium inventory, further
focuses our capital allocation, provides
operational efficiencies, is accretive to
free cash flow per share, allows us to
grow our base dividend, preserves our
balance sheet strength and improves our
greenhouse gas emissions metrics. "
Chesapeake mentions that it is
financing the acquisitions in part by
selling its Powder River Basin assets to
Continental Resources Inc. for about
$450 million. The assets include about
172,000 net acres and 350 operated
wells in southeastern Wyoming and
2021 volumes project to average about
19,000 barrels of oil equivalent a day,
approximately 58% of which will be
crude oil and natural gas liquids.
Chesapeake adds that it expects the
Powder River Basin deal also will close
in the first quarter of this year. ❒
18 THE AMERICAN OIL & GAS REPORTER
Coming In March
The latest in oil and gas issues.
Civitas Purchases
Bison Oil & Gas II
To Grow In DJ Basin
DENVER-Civitas Resources Inc.
has signed definitive agreements to
acquire privately held Denver-Julesburg
Basin operator Bison Oil & Gas II LLC
for approximately $346 million. The
company says it expects the transaction
to close in the first quarter of 2022.
According to Civitas, the deal
demonstrates its disciplined approach
to consolidation with a focus on value
creation and accretion. The transaction
strengthens Civitas' portfolio by
adding 102 gross high-quality
locations, of which 38 are fully permitted,
the company reports. Civitas
adds that the purchase expands its production
by approximately 9,000
barrels of oil equivalent a day, composed
of 75% oil and 90% liquids,
without incremental general and
administrative expense.
Concurrent with the transaction,
Civitas announced that Eric Greager
stepped down as president and chief
executive officer. During his tenure,
Greager oversaw the successful integrations
of Bonanza Creek Energy
Inc., HighPoint Resources Inc.,
Extraction Oil & Gas Inc. and
Crestone Peak Resources LLC. Civitas
reports that Chairman Ben Dell has
assumed the role of interim CEO,
while Greager will continue to serve
as a technical consultant to Civitas for
the next 12 months.
The company adds that it has formed
a search committee comprised of members
of its Board of Directors to identify
a new CEO. ❒
Earthstone Energy
Buys Midland Basin's
Bighorn Permian
THE WOODLANDS, TX.-
Earthstone Energy Inc. has entered an
agreement to acquire the assets of
privately held Midland Basin producer
Bighorn Permian Resources LLC. The
acquisition's aggregate purchase price is
approximately $860 million, Earthstone
says, adding that it expects to close the
transaction early in the second quarter.
According to Earthstone, the
acquired assets:
· Cover about 110,600 net acres
(98% operated, 93% working interest,
99% held by production) in the Midland
Basin, primarily in Texas' Reagan and
Irion counties;
· Offer 49 gross/35 net Earthstone
identified drilling locations on
conservative spacing and economic
assumptions;
· Totaled an average daily
production of about 42,400 barrels of
oil equivalent a day, (25% oil, 57%
liquids) during November 2021; and
· Provide a low decline, proved
developed producing asset base, with a
roughly 19% forecast production
decline from 2022 to 2023.
Earthstone President and Chief
Executive Officer Robert J. Anderson
describes the acquisition as another
step in the company's transformation.
" Combining the Bighorn acquisition
with the four acquisitions completed in
2021 and the pending Chisholm
acquisition, we will have more than
quadrupled our daily production,
greatly expanded our Permian Basin
acreage footprint and increased our
free cash flow generating capacity by
many multiples since year-end 2020, "
he relates. " The proximity of the
Bighorn assets to existing Earthstone
operations positions us to create
further value by applying our proven
operating approach to these assets,
primarily in the form of reducing
operating costs. " ❒
IAGC Changes Name
To EnerGeo Alliance
HOUSTON-The International
Association of Geophysical
Contractors has changed its name to
the EnerGeo Alliance.
According to the organization, the
new name unites the energy and
geoscience industries and conveys a
recharged and ongoing commitment to
providing solutions for the energy
evolution as members continue to
discover, develop and deliver the
mainstay, low-carbon and alternative
energy the world demands.
EnerGeo Alliance assures that it will
continue representing its members across
50 countries, guiding informed policy
decisions on energy exploration,
operations and production. As a provider
of science-based regulatory information
and advocacy for energy companies and
American Oil and Gas Reporter - February 2022

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