By Ben Glickman
SilverBow Resources said Monday that it would acquire oil and gas assets in South Texas from Chesapeake Energy for $700 million.
The Houston-based oil and gas company will pay $650 million in cash upfront and an additional $50 million one year after the close of the transaction. The deal is expected to close by the end of the year.
Chesapeake Energy, an Oklahoma City-based energy company, said the sale includes 42,000 net acres and about 540 wells. The assets produced 29,000 barrels of oil equivalent daily in the second quarter of the year, the company said.
SilverBow expects to fund the deal with cash on hand and debt. The company has secured $425 million in additional debt under its existing credit facility in connection with the deal.
Chesapeake’s proceeds from selling its Eagle Ford assets now total $3.5 billion. The move will allow the company to focus on its Marcellus and Haynesville positions, Chief Executive Nick Dell’Osso said.
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