Chesapeake Energy Corp. Closes Southern Marcellus & Utica Shale Sale; Announces $1 Billion Common Stock Repurchase Authorizat...
December 22 2014 - 4:01PM
Business Wire
Chesapeake Energy Corporation (NYSE:CHK) today announced the
closing of its asset sale to Southwestern Energy Company (NYSE:SWN)
and initiatives to further enhance shareholder value.
Chesapeake closed the previously announced sale of its assets in
the Southern Marcellus Shale and a portion of the Eastern Utica
Shale to Southwestern for net proceeds of $4.975 billion. The $400
million adjustment to the previously reported $5.375 billion sale
price is attributable to a settlement for various items, including
Southwestern’s waiver of any future claims related to title defects
and environmental liabilities. The properties sold to Southwestern
consist of approximately 413,000 net acres and approximately 1,500
wells located in northern West Virginia and southern Pennsylvania,
along with related property, plant and equipment. Net production of
the divested properties in mid-December was approximately 57,000
barrels of oil equivalent (boe) per day. This represents
approximately 7% of a new company record for total production that
was achieved last week of 770,000 boe per day.
Doug Lawler, Chesapeake’s Chief Executive Officer, commented,
“This transaction marks another significant event in Chesapeake’s
transformation and solidifies our strong financial position. With
the closing of this transaction and the available borrowing
capacity under our unsecured revolving credit facility, Chesapeake
now has a liquidity position of approximately $9 billion, putting
Chesapeake in an advantageous position to enhance shareholder value
in this volatile commodity price market. Consistent with our
financial strength and our focus on enhancing shareholder value,
Chesapeake’s Board of Directors has authorized a $1 billion common
stock repurchase program. Further, building on our outstanding
operational momentum of 2014, we will be focused on additional
strategic growth opportunities to enhance our asset portfolio and
continue to improve our ability to deliver top quartile growth
metrics and shareholder returns.”
Chesapeake Energy Corporation (NYSE:CHK) is the
second-largest producer of natural gas and the 11th largest
producer of oil and natural gas liquids in the U.S.
Headquartered in Oklahoma City, the company's operations are
focused on discovering and developing its large and geographically
diverse resource base of unconventional natural gas and oil assets
onshore in the U.S. The company also owns substantial
marketing and compression businesses. Further information is
available at www.chk.com where Chesapeake routinely
posts announcements, updates, events, investor information,
presentations and news releases.
This news release includes “forward-looking statements”
within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements are statements other than statements of
historical fact that give our current expectations or forecasts of
future events. They include, but are not limited to, the effect of
the asset sale and use of proceeds, the common stock repurchase
program and other strategic growth alternatives on the Company’s
efforts to enhance current and long-term shareholder value, deliver
top quartile growth metrics and shareholder returns. The
company’s ability to execute on the stock repurchase program
depends upon many factors, including the price of the common stock,
the availability of other alternatives and market conditions.
Although we believe the expectations and forecasts reflected in the
forward-looking statements are reasonable, we can give no assurance
they will prove to have been correct. They can be affected by
inaccurate assumptions or by known or unknown risks and
uncertainties. Chesapeake does not intend to update any forward
looking statements. Factors that could cause actual results to
differ materially from expected results include those described
under “Risk Factors” in Item 1A of our 2013 Annual Report on Form
10-K, as filed with the U.S. Securities and Exchange Commission on
February 27, 2014. These risk factors include: the volatility of
natural gas, oil and NGL prices; the limitations our level of
indebtedness may have on our financial flexibility; declines in the
prices of natural gas and oil potentially resulting in a write-down
of our asset carrying values; the availability of capital on an
economic basis, including through planned asset sales, to fund
reserve replacement costs; our ability to replace reserves and
sustain production; uncertainties inherent in estimating quantities
of natural gas, oil and NGL reserves and projecting future rates of
production and the amount and timing of development expenditures;
our ability to generate profits or achieve targeted results in
drilling and well operations; leasehold terms expiring before
production can be established; hedging activities resulting in
lower prices realized on natural gas, oil and NGL sales; the need
to secure hedging liabilities and the inability of hedging
counterparties to satisfy their obligations; drilling and operating
risks, including potential environmental liabilities; legislative
and regulatory changes adversely affecting our industry and our
business, including initiatives related to hydraulic fracturing,
air emissions and endangered species; a deterioration in general
economic, business or industry conditions having a material adverse
effect on our results of operations, liquidity and financial
condition; oilfield services shortages, gathering system and
transportation capacity constraints and various transportation
interruptions that could adversely affect our revenues and cash
flow; adverse developments and losses in connection with pending or
future litigation and regulatory investigations; cyber-attacks
adversely impacting our operations; and an interruption at our
headquarters that adversely affects our business.
Chesapeake Energy CorporationInvestor Contact:Brad
Sylvester, CFA, 405-935-8859ir@chk.comorMedia Contact:Gordon
Pennoyer, 405-935-8878media@chk.com
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