Chesapeake Energy has entered into a definitive agreement to acquire WildHorse Resource Development, an oil and gas company with operations in the Eagle Ford Shale and Austin Chalk formations in southeast Texas, for approximately $3.977bn.
The acquisition of WildHorse expands Chesapeake’s oil growth platform and accelerates progress toward its strategic and financial goals of enhancing margins, achieving sustainable free cash flow generation, and reducing net debt to EBITDA ratio.
Doug Lawler, Chesapeake’s President and Chief Executive Officer, stated: “This transaction accelerates Chesapeake’s strategic plan and expands the value-creation opportunities for our shareholders by adding a premier asset at an attractive valuation, significantly boosting oil production, EBITDA margins and cash flow growth, while improving our leverage metrics. The addition of WildHorse, together with our substantial growth profile in the Powder River Basin, advances our transformation into a highly competitive company with a diverse portfolio of high-quality assets, a stronger balance sheet and meaningful oil-growth potential.”
Chesapeake expects to finance the cash portion of the WildHorse acquisition, which is expected to be between $275m and approximately $400m, through its revolving credit facility. The transaction, which is subject to shareholder approvals from both companies and customary closing conditions and regulatory approvals, is expected to close in the first half of 2019.
For more information visit: www.chk.com
2nd November 2018