Chord Energy (NASDAQ: CHRD) continues to establish itself as a premier operator in the Bakken, leveraging capital efficiency, operational excellence, and long-lateral drilling strategies to drive strong free cash flow and shareholder returns. In their Q4 2024 Earnings Presentation, Chord emphasized their commitment to disciplined growth, efficiency improvements, and maintaining high-quality production in the Williston Basin.

Here’s a breakdown of how Chord Energy is optimizing efficiency and solidifying its leadership position in the Bakken.

1. Bakken: A Basin Built for Consistency and Growth

As a leading operator in the Williston Basin, Chord Energy holds 1.3 million net acres in the region, producing approximately 271,000 barrels of oil equivalent per day (MBoepd), with 56% oil content. The company continues to enhance the economic viability of the Bakken through capital discipline, long-lateral development, and infrastructure improvements.

Key Strengths of Chord Energy in the Bakken:

✅ Strong Free Cash Flow Generation – Chord is returning 75%+ of free cash flow (100% in Q4 2024) to shareholders.
✅ Premium Asset Base – High-quality resource positions with ~10 years of low-breakeven oil inventory.
✅ Excess Takeaway Capacity – The Bakken benefits from ample pipeline and rail capacity, reducing bottlenecks.
✅ Stable Production & High Oil Cut – Reduced production variability compared to other basins like the Permian and Eagle Ford.

Williston Basin Well Performance vs. Other Basins

Strong Risk-Adjusted Well Productivity: Bakken wells deliver consistent production rates with lower variability than Permian and Eagle Ford wells.
Minimal Gas-to-Oil Ratio (GOR) Volatility: Unlike the Permian, where GOR fluctuates, Bakken wells maintain a steady high oil cut, improving well economics.
Enhanced Gas & NGL Takeaway: Chord is improving infrastructure to reduce gas flaring and increase NGL recoveries, strengthening margins.

2. Efficiency: Maximizing Capital Productivity in the Bakken

Chord’s capital efficiency initiatives are a key differentiator in their Bakken operations, allowing them to generate significant free cash flow while maintaining production levels.

How Chord Energy is Driving Efficiency:

🔹 1. Expanding Long-Lateral Development

3-mile laterals outperform 2-mile wells:
- 50% increase in estimated ultimate recovery (EUR) for only 20% higher well costs.
- 3-mile wells cost ~20% less per foot than 2-mile wells, improving capital efficiency.
Future Expansion: 4-mile laterals:
- The company is exploring longer laterals to further enhance cost savings and production efficiency.

🔹 2. Faster Drilling & Completions

Drill times improved by ~23% vs. Williston peers in Q4 2024.
Simulfrac completion strategy increased efficiency by ~40% over traditional zipper frac operations.
Cycle Time Reductions:
- Faster drilling cycles are leading to lower well costs and improved capital deployment.

🔹 3. Optimizing Capital Efficiency vs. Peers

2025 capital efficiency expected to improve by ~14% vs. peers.
2023 capital efficiency: $830 per completed foot → 2024: $687 per completed foot (~17% improvement).
2025-2027 strategy continues this trend, leveraging more 3-mile wells.

🔹 4. Maintaining Low Reinvestment Rate

Chord has one of the lowest reinvestment rates in the industry, prioritizing free cash flow and shareholder returns over aggressive drilling.
Disciplined CapEx Management:
- 2025 CapEx set at $1.4 billion, which is $90 million lower than the original 2024 plan.
- Only ~40% of CapEx will go to drilling & completion, with the rest focused on efficiency gains.

3. Financial Strength & Return of Capital Strategy

Chord Energy’s strong balance sheet and low leverage (0.3x net debt/EBITDA) allow the company to prioritize capital returns over high reinvestment rates.

2024 Capital Return Highlights:

💰 $4 billion+ returned to investors since 2021
📈 5% of shares repurchased since the Enerplus combination
📢 $5.20 per share base dividend (annualized)
🔄 Preference for share buybacks in current market conditions

With industry-leading capital efficiency, Chord Energy is positioned to generate substantial free cash flow while maintaining stable oil production in the Bakken.

Conclusion: Chord Energy’s Winning Strategy in the Bakken

Chord Energy’s efficiency-driven strategy in the Bakken positions them as a top-tier operator with a low-cost, high-margin asset base. The company’s focus on long-lateral development, reduced drilling costs, and disciplined capital allocation ensures sustained free cash flow and strong shareholder returns.

🔹 Key Takeaways: ✅ Leading Williston Basin Operator with premium acreage and consistent production.
✅ 3-mile and 4-mile laterals improving cost structure and well economics.
✅ Drill times reduced by ~23%, Simulfrac completion efficiency up ~40%.
✅ Reinvestment rates remain low, maximizing free cash flow and returning capital to shareholders.
✅ 2025-2027 strategy enhances efficiency and cost control, driving long-term profitability.

Chord Energy’s ability to maximize efficiency and returns while maintaining a disciplined reinvestment rate makes it a standout player in the Bakken. As the company continues long-lateral development and operational improvements, it is well-positioned to deliver strong cash flow and competitive returns in the years ahead.