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Newfield to acquire an additional 42,000 net acres in STACK

THE WOODLANDS, Texas, May 5, 2016 /PRNewswire/ -- Newfield Exploration Company NFX, -0.79% today signed a definitive purchase and sale agreement with a subsidiary of Chesapeake Energy Corporation CHK, +1.40% to acquire approximately 42,000 net acres in the Anadarko Basin STACK play for $470 million. The transaction will have an effective date of April 1, 2016 and closing is subject to customary adjustments. Newfield expects to fund the transaction with cash on hand and closing is planned for the second quarter of 2016.

Transaction Highlights:

  • Expands Newfield's industry-leading STACK footprint to approximately 265,000 net acres. Significant overlap with Newfield's existing acreage in Kingfisher, Blaine, Dewey and Canadian counties (see map in @NFX located on the Company's website);
  • More than 90% of the acreage to be acquired is held-by-production, requiring only modest capital investments over the next several years;
  • Of the total consideration, approximately $50 million is associated with proved developed producing (PDP) reserves and reimbursement for recent STACK wells which are currently drilling or have been drilled and are planned for completion. Excluding PDP and reimbursement allocations, the undeveloped acreage value equates to approximately $10,000 per acre;
  • Current net production from the assets is approximately 3,800 BOEPD (55% liquids) and is expected to more than double by year-end 2016 as recently drilled wells are completed and turned to sales;
  • Including this transaction, Newfield estimates that its cumulative investments in STACK acreage to date total less than $3,000 per acre. Newfield's average working interest across the 265,000 net acres in STACK would be approximately 50%;
  • Substantial future upside from...