Chesapeake Energy is Selling Oil, Gas Acres In Michigan

Date : 06/07/2012 @ 7:48PM
Source : Dow Jones News
Stock : Chesapeake Energy Corp. (CHK)
Quote : 5.61  -0.06 (-1.06%) @ 1:22PM

Chesapeake Energy is Selling Oil, Gas Acres In Michigan

Chesapeake (NYSE:CHK)
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    By Ben Lefebvre 
 

Chesapeake Energy Corp. (CHK) is selling 450,000 net acres in oil-and-gas fields in north-central Michigan, the third parcel of land the cash-strapped company has put up for sale in just over a week, an advisory firm said Thursday.

The Oklahoma City natural-gas company is trying to raise money to rein in an estimated $10 billion cash shortfall brought on as natural-gas prices have tumbled. Last week, Chesapeake put up for sale oil-and-gas acreage in Ohio and eastern Texas; the company also has been trying to sell land in the oil-rich Permian Basin in west Texas and Mississippi Lime basin in Kansas and Oklahoma.

The latest parcel includes land in the Collingwood and A-1 formations that offer the potential for production of oil and natural-gas liquids, according to the prospectus offered by Meagher Energy.

Chesapeake, the country's second-largest natural-gas producer after Exxon Mobil Corp. (XOM), is trying to focus production on oil and natural-gas liquids as natural-gas prices fell to a decade low of $1.90 a million British thermal units in late April. It also is trying to cut its long-term debt to around $9.5 billion from more than $13 billion in the first quarter.

Chesapeake completed $2.6 billion in asset sales in April. The assets the company has since put up for sale could be valued at another $15 billion, although buyers for natural-gas assets could be difficult to find, analysts have said.

Last month, Chesapeake secured $4 billion in loans from Goldman Sachs Group Inc. (GS) and Jefferies Group Inc.'s (JEF) Jefferies & Co.

Write to Ben Lefebvre at ben.lefebvre@dowjones.com

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