Chevron Corporation (NYSE: CVX) announced that its subsidiary, Chevron U.S.A. Inc., has agreed to acquire 246,000 net leasehold acres in the Delaware Basin in New Mexico, a part of the Permian Basin, from Chesapeake Energy Corporation (NYSE: CHK). Terms of the agreement were not disclosed.
"This acquisition in a premier emerging play in the Permian Basin grows our significant leasehold position there," said George Kirkland, vice chairman, Chevron Corporation. "These early-in-life, liquids-rich unconventional assets have the potential to be significant future contributors to Chevron's robust North American operations."
"This investment gives us significant exposure to stacked Delaware Basin plays where we already enjoy a substantial position," said Gary Luquette, president of Chevron North America Exploration and Production Company. "It complements our existing Permian Basin operations and provides us access to additional people and resources to execute our growth strategy there."
Chevron already holds approximately 700,000 net acres in the Delaware Basin, which contains several oil and wet gas plays stacked together within several thousand feet of hydrocarbon-bearing rock. The plays include the Avalon Shale and the Bone Spring Sands.
The acreage included in the agreement has current net production of 7,000 barrels of oil equivalent per day, with the potential to increase substantially over the next few years. The acquired acreage will become part of Chevron's operated and non-operated existing Delaware Basin activities.
The transaction is subject to some third-party preferential rights and is expected to close within the next 30 days, pending customary regulatory approvals.
Chevron agrees to acquire Delaware Basin acreage