INEOS to acquire $1.4-billion Eagle Ford asset package from Chesapeake

INEOS Energy agreed to acquire a portion of Chesapeake Energy Corp.’s remaining Eagle Ford assets for $1.4 billion.

With the deal, INEOS acquires about 172,000 net acres and some 2,300 wells in the black oil portion of Chesapeake’s remaining Eagle Ford asset position, primarily in Dimmit, LaSalle, and McMullen counties, Texas, along with related property, plant, and equipment, Chesapeake said in a release Feb. 21.

The transaction marks INEOS Energy’s entry as operator into the US onshore oil and gas market, INEOS said in a separate release.

Average net daily production from the properties was about 36,000 boe (81% liquid) during fourth-quarter 2022. As of Dec. 31, 2022, net proved reserves associated with the properties were about 144 MMboe, Chesapeake said.

Eagle Ford exit

The deal puts Chesapeake closer to a complete exit of the South Texas Eagle Ford as it looks to focus capital on its Marcellus and Haynesville positions. Earlier this month, WildFire Energy I LLC, Houston, picked up an Eagle Ford asset package from Chesapeake for $1.425 billion (OGJ Online, Feb. 6, 2023).

Thus far, Chesapeake has secured “an aggregate of $2.825 billion to date” and remains “actively engaged” with other parties to complete the sale of its remaining Eagle Ford position, said Nick Dell’Osso, Chesapeake president and chief executive officer.

Fewer Eagle Ford assets mean a reduced budget for what remains, Chesapeake outlined in a fourth-quarter earnings presentation Feb. 21. The company plans to run 0.5-1 rig on its remaining Eagle Ford position and has guided midpoint spending to $230 million for the year, down from $414 million on the larger portfolio in 2022. 

The deal is expected to close in this year’s second quarter with an effective date of Oct. 1, 2022. Chesapeake will receive $1.175 billion upon closing, subject to customary adjustments, with the additional $225 million paid in annual installments of $56.25 million.