One of the world's largest chemical makers, UK-based INEOS, has entered U.S. oil and gas production after agreeing to buy Eagle Ford assets from Chesapeake Energy for $1.4 billion, thus gaining access to cheaper natural gas.
The deal marks INEOS Energy's entry as an operator into the U.S. onshore oil and gas market, as it acquires 2,300 wells producing net 36,000 barrels of oil equivalent per day (boed). The acquisition, which includes production and exploration leases across 172,000 net acres, is expected to be completed in the second quarter of the year, with an effective date of October 2022.
"The deal marks our entry into the US market and is another significant step in the INEOS Energy journey. Over the last two decades, US onshore oil and gas production has provided security of supply for the global market and competitive advantage for US industry," INEOS Energy's chairman Brian Gilvary said in a statement.
Chesapeake Energy, for its part, is on its way to exit the Eagle Ford basin as it plans to focus on the premium assets and returns it has in the Marcellus and Haynesville shale gas basins and gain more exposure to U.S. LNG exports.
"Today marks another important step on our path to exiting the Eagle Ford as we focus our capital on the premium rock, returns and runway of our Marcellus and Haynesville positions," Chesapeake president and chief executive officer Nick Dell'Osso said in a statement.
"We are pleased to have secured an aggregate of $2.825 billion to date and remain actively engaged with other parties regarding the rest of our Eagle Ford position."
Last month, Chesapeake Energy agreed to sell approximately 377,000 net acres and approximately 1,350 wells in the Brazos Valley region of its Eagle Ford asset, along with related property, plant, and equipment, to WildFire Energy I LLC for $1.425 billion.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More