Chesapeake to sell remaining Eagle Ford assets to SilverBow Resources for $700 million

Chesapeake Energy Corp.
CHK,
-0.87%
said Monday it has agreed to sell its remaining Eagle Ford assets to SilverBow Resources Inc.
SBOW,
-0.88%
for $700 million. The deal, which is expected to close in 2023, brings the total proceeds from the Eagle Ford exit to more than $3.5 billion. The Eagle Ford assets are located in Dimmit and Webb counties in Texas. Chesapeake agreed to sell about 42,000 new acres and about 540 wells in the condensate rich portion of the asset, along with property, plant and equipment. The move will allow the company to focus on its Marcellus and Haynesville positions, said CEO Nick Dell’Osso. The average net daily production from the properties came to about 29,000 barrels of oil equivalent a day in the second quarter, generating about $50 million of EBITDAX. Chesapeake will receive $650 million on close and the remaining $50 million within one year of close. SilverBow will also pay the Oklahoma City-based company an additional contingent payment of $25 million if oil prices average between $75 and $80 a barrel WTI NYMEX or $50 million if prices average above $80 in the year following the close. The company is planning to use the proceeds to bolster its balance sheet and for share buybacks. Chesapeake’s stock was not active premarket but has fallen 9% in the year to date, while the S&P 500
SPX,
+0.28%
has gained 16%.