Newfield to acquire STACK acreage from Chesapeake unit

Newfield Exploration Co., The Woodlands, Tex., has agreed to acquire 42,000 net acres in the Anadarko basin STACK play of Oklahoma from a subsidiary of Chesapeake Energy Corp., Oklahoma City, for $470 million. The deal is effective Apr. 1, and is expected to close during the second quarter.

The deal expands Newfield’s STACK footprint to 265,000 net acres, overlapping with the firm’s existing acreage in Kingfisher, Blaine, Dewey, and Canadian counties. More than 90% of the acreage to be acquired is held-by-production.

Of the total consideration, $50 million is associated with proved developed producing (PDP) reserves and reimbursement for recent STACK wells that are currently drilling or have been drilled and are planned for completion. Excluding PDP and reimbursement allocations, the undeveloped acreage value equates to $10,000/acre.

Current net production from the assets is 3,800 boe/d—of which 55% is liquids—and is expected to more than double by yearend as recently drilled wells are completed.

Including this deal, Newfield estimates that its cumulative investments in STACK acreage to date total less than $3,000/acre. Newfield’s average working interest across the 265,000 net acres in STACK would be 50%.

Newfield says it sees future upside from multiple prospective horizons, improving efficiencies in drilling and completion optimization, and enhanced well performance. The firm has identified more than 1,000 potential drilling locations on this new acreage.

Chesapeake in 2016 has closed or has under signed sales agreements $1.2 billion in gross proceeds from asset divestitures.

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

Whitepapers

The Time is Right for Optimum Reliability: Capital-Intensive Industries and Asset Performance Management

Imagine a plant that is no longer at risk of a random shutdown. Imagine not worrying about losing...

Going Digital: The New Normal in Oil & Gas

In this whitepaper you will learn how Keystone Engineering, ONGC, and Saipem are using software t...

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...