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Acquisitions
 9 Months Ended
Sep. 30, 2022
Business Combination and Asset Acquisition [Abstract]  
Acquisitions Acquisitions
2022 Acquisitions
Whiting merger. On July 1, 2022, the Company completed the Merger with Whiting and issued 22,671,871 shares of common stock and paid $245.4 million of cash to Whiting shareholders. Also on July 1, 2022 and pursuant to the Merger Agreement, the Company (i) assumed the outstanding Whiting Series A Warrants and Whiting Series B Warrants, (ii) assumed the outstanding Whiting equity-based compensation awards and (iii) paid cash to satisfy and discharge in full the Whiting credit facility.
Purchase price allocation. The Company recorded the assets acquired and liabilities assumed in the Merger at their estimated fair value on July 1, 2022 of $2.8 billion. The allocation of the fair value to the identifiable assets acquired and liabilities assumed resulted in no goodwill or bargain purchase gain being recognized. Determining the fair value of the assets and liabilities of Whiting requires judgement and certain assumptions to be made. See Note 6—Fair Value Measurements for additional information.
The tables below present the total consideration transferred and its allocation to the identifiable assets acquired and liabilities assumed as of the acquisition date on July 1, 2022.
Purchase Price Consideration
(In thousands)
Common stock issued to Whiting shareholders(1)
$2,478,036 
Cash paid to Whiting shareholders(1)
245,436 
Replacement of Whiting Series A Warrants and Whiting Series B Warrants(2)
79,774 
Replacement of Whiting equity-based compensation awards(3)
27,402 
Cash paid to settle Whiting credit facility(4)
2,154 
Total consideration transferred$2,832,802 
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(1)     The Company issued 22,671,871 shares of common stock and paid $245.4 million of cash to Whiting shareholders as Merger Consideration. Each holder of Whiting common stock received 0.5774 shares of common stock as Share Consideration and $6.25 of cash as Cash Consideration. The fair value of the common stock issued was based on the closing price of the Company’s common stock on July 1, 2022 of $109.30. See Note 17—Stockholder's Equity for additional information.
(2)    The Company assumed (i) 4,833,455 Whiting Series A Warrants and (ii) 2,418,832 Whiting Series B Warrants. The replacement of Whiting Series A and B Warrants was based on the closing price of the warrants on July 1, 2022 of $11.25 and $10.50, respectively. See Note 17—Stockholder's Equity for additional information.
(3)    The Whiting equity awards were replaced with awards issued by Chord with similar terms and conditions as the original awards. The fair value of the replacement equity awards attributable to pre-Merger service was recorded as consideration transferred. See Note 16— Equity-Based Compensation for additional information.
(4)    On July 1, 2022, the Company fully satisfied all obligations under the Whiting credit facility and the Whiting credit facility was concurrently terminated. See Note 13—Long-Term Debt for additional information.
Purchase Price Allocation
(In thousands)
Assets acquired:
Cash and cash equivalents$94,641 
Accounts receivable, net329,331 
Inventory35,256 
Prepaid expenses14,851 
Other current assets428 
Current assets held for sale16,074 
Oil and gas properties3,192,564 
Other property and equipment31,244 
Long-term inventory3,138 
Operating right-of-use assets15,752 
Deferred tax assets250,170 
Other assets3,346 
Total assets acquired$3,986,795 
Liabilities assumed:
Accounts payable$116,769 
Revenues and production taxes payable249,370 
Accrued liabilities215,218 
Derivatives instruments (current liability)471,693 
Current operating lease liabilities2,629 
Other current liabilities727 
Current liabilities held for sale9,410 
Asset retirement obligations57,197 
Derivative instruments (long-term liability)15,128 
Operating lease liabilities13,123 
Other liabilities2,729 
Total liabilities assumed$1,153,993 
Net assets acquired$2,832,802 

Post-merger operating results. The results of operations of Whiting have been included in the Company’s unaudited condensed consolidated financial statements since the closing of the Merger on July 1, 2022. The following table summarizes the total revenues and income from continuing operations before income taxes attributable to Whiting that were recorded in the Company’s Condensed Consolidated Statement of Operations for the periods presented.
Three and Nine Months Ended September 30, 2022
(In thousands)
Revenues$562,089 
Income from continuing operations before income taxes299,118 
Unaudited pro forma financial information. Summarized below are the condensed consolidated results of operations for the periods presented, on an unaudited pro forma basis, as if the Merger had occurred on January 1, 2021. The information presented below reflects pro forma adjustments based on available information and certain assumptions that the Company believes are factual and supportable. The pro forma financial information includes certain non-recurring pro forma adjustments that were directly attributable to the Merger, including transaction costs incurred by the Company and Whiting. The unaudited pro forma financial information does not purport to be indicative of results of operations that would have occurred had the Merger occurred on the basis assumed above, nor is such information indicative of the Company’s expected future results. The pro forma results of operations do not include any future cost savings or other synergies that may result from the Merger or any estimated costs that have not yet been incurred by the Company to integrate the Whiting assets.
Three Months Ended September 30,Nine Months Ended September 30,
202120222021
(In thousands)
Revenues$803,076 $3,739,261 $2,210,632 
Net income attributable to Chord224,262 1,701,478 21,525 
Net income attributable to Chord per share:
Basic$5.26 $40.53 $0.50 
Diluted5.13 38.92 0.50 
Other information. The Company recorded an assumed liability of $18.0 million in accrued liabilities on the Condensed Consolidated Balance Sheet as of July 1, 2022 related to success-based transaction costs that were incurred by Whiting prior to the consummation of the Merger. These amounts were paid during the three months ended September 30, 2022.
In addition, the Company recorded an assumed liability of $55.0 million in accrued liabilities on the Condensed Consolidated Balance Sheet as of July 1, 2022 related to a loss contingency from a legal proceeding with Arguello Inc. and Freeport-McMoran Oil & Gas LLC that the Company determined was both probable and reasonably estimable under FASB ASC 450-20, Loss Contingencies as of the consummation of the Merger. See Note 19 — Commitments and Contingencies for additional information.
2021 Acquisitions
Williston Basin Acquisition. On October 21, 2021, the Company completed the acquisition of approximately 95,000 net acres in the Williston Basin, effective April 1, 2021, from QEP Energy Company (“QEP”), a wholly-owned subsidiary of Diamondback Energy Inc., for total cash consideration of $585.8 million (the “Williston Basin Acquisition”). The Company paid a deposit to QEP of $74.5 million on May 3, 2021 and $511.3 million at closing on October 21, 2021. The Company funded the Williston Basin Acquisition with cash on hand, including proceeds from the Permian Basin Sale (defined in Note 10—Divestitures) and the Senior Notes (defined in Note 13—Long-Term Debt).
The Williston Basin Acquisition was accounted for as an asset acquisition under ASC 805, since substantially all of the fair value of the assets acquired related to proved oil and gas properties. The Company applied the cost accumulation model under ASC 805, and as such, recognized the assets acquired in the Williston Basin Acquisition at cost, including transaction costs, on a relative fair value basis. There were no material deferred income taxes from the Williston Basin Acquisition, as the tax basis of the assets acquired and liabilities assumed was equal to the book basis at closing.