US shale player Chord Energy (NASDAQ: CHRD) announced this week that it had agreed to sell its entire non-operated position in the Marcellus shale play to POSCO International (KRX: 047050). The position is being sold for total gross consideration of $550mn by one of Chord’s subsidiaries.

The transaction, which is anticipated to close in the fourth quarter of this year, will turn Chord into a pure-play Williston Basin producer. The Williston is primarily known for oil production, while the Marcellus is a leading shale gas play.

Chord’s Marcellus position consists of roughly 32,000 net acres (129.5 square km) in Pennsylvania. The assets have trailing 12-month production of around 121mn cubic feet (3.4mn cubic metres) per day and output consists of 100% residue gas with no natural gas liquids (NGLs) according to the announcement.

Chord said it had received a $55mn deposit for the acreage, with the balance due to be paid upon closing of the deal. It added that its net leverage was expected to decline further as a result of the sale, remaining “well below” levels seen among its peers.

The proceeds from the transaction will be deployed “over time in a manner consistent with the company's disciplined capital allocation framework”, Chord said, without providing further details.

As a result of the transaction, Chord expects its oil weighting to increase by roughly 4-5 percentage points, while anticipating that its gas realisations will decrease by around 16-30 percentage points. It also expects its capital expenditures to fall by around $25mn per year.

The company said it would update its production guidance when it releases its third-quarter earnings results in November.

"The divestiture of our non-operated Marcellus position builds on Chord's multi-year track record of disciplined capital allocation and portfolio optimisation," stated Chord’s CEO, Danny Brown. "Following the close of the Enerplus transaction in May 2024, Chord identified its non-operated Marcellus position as non-core. Since then, we have benefited from the Marcellus' significant free cash flow generation and are pleased to bring substantial value forward through the divestiture announced today,” he continued. “This highly accretive transaction allows us to further strengthen our peer-leading balance sheet and focus on creating significant value from our world-class Williston Basin position. Chord's disciplined capital allocation, operational efficiency, and financial strength position us to create value while navigating a volatile macro environment."

South Korea’s POSCO is the latest in a series of Asian companies to buy a stake in US shale, with many of those companies pursuing gas-weighted assets amid booming demand from LNG export plants on the US Gulf Coast.