Chesapeake Energy Selling Fayetteville Shale Assets
by February 6, 2011 7:00 pm 163 views
Chesapeake Energy Corp. is putting its Fayetteville Shale assets up for sale in addition to a fracking subsidiary in a deal it hopes will garner up to $5 billion.
The company announced the planned sale this morning.
In addition to selling its Arkansas shale play holdings, Chesapeake wants to sell its minority stakes in Frac Tech Holdings, LLC and Chaparral Energy, Inc. Chesapeake owns 25.8% of Frac Tech, a well drilling company, and 20.0% of Chaparral, a smaller Oklahoma independent gas and oil producer.
In the Fayetteville Shale, Chesapeake is the second-largest producer of natural gas with current net production of approximately 415 million cubic feet of natural gas equivalent production per day and owns approximately 487,000 net acres of leasehold.
The company says that if the sales go through it plans to reduce its long-term debt by 25% in 2011-2012.
“We have received strong positive feedback from a number of our investors with respect to the announcement of our 25/25 Plan in early January and last week’s announcement of our $1.3 billion Niobrara joint venture with an affiliate of CNOOC Limited," said Aubrey K. McClendon, Chesapeake’s CEO. "We believe the three proposed asset sales announced today and the Niobrara joint venture are all likely to be completed in the first half of 2011 and will provide us with strong momentum into the second half of 2011 as we move forward in executing our plan.”