US: INEOS, one of the world's largest chemical producers, shakes up the U.S. oil and gas industry as it enters production with its recent purchase of Eagle Ford assets from Chesapeake Energy for a whopping $1.4 billion. This move gives INEOS access to a more competitive source of Natural gas, allowing them to potentially lower their costs in producing their chemicals.
INEOS Energy has announced a major acquisition that represents their entry into the U.S. onshore oil and gas market. The deal includes 2,300 wells with net 36,000 barrels of oil equivalent per day (boed) in production, as well as exploration leases across 172,000 net acres. It 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 is exiting the Eagle Ford basin in order to refocus on their premium assets from the Marcellus and Haynesville shale gas basins. By doing so they hope to gain more exposure to U.S. LNG exports and build on their returns.
“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.”
Chesapeake Energy recently announced its sale of 377,000 net acres and 1,350 wells in the Brazos Valley region of its Eagle Ford asset. This includes related property, plant, and equipment that are being sold to WildFire Energy I LLC for a total of $1.425 billion.