Chesapeake Selling Ohio Assets for $2 Billion
July 26 2018 - 07:44PM
Dow Jones News
By Rebecca Elliott
Chesapeake Energy Corp. is selling its last remaining oil and
gas holdings in Ohio's Utica Shale, a move aimed at whittling down
the company's debt and enabling it to focus increasingly on crude
production.
The roughly $2 billion sale to Houston-based Encino Acquisition
Partners, announced Thursday, is the latest in a series of deals by
Oklahoma City-based Chesapeake to improve its finances.
"This essentially ends the era of asset sales as being the
principal instrument for improving our financial balance sheet,"
Chesapeake Chief Executive Doug Lawler said in an interview.
Under the deal, expected to close in the fourth quarter,
Chesapeake would shed its last 320,000 acres in the Utica, a region
the company's late co-founder, wildcatter Aubrey McClendon, once
called the "biggest thing to hit Ohio since the plow." Chesapeake's
920 wells there produced the equivalent of about 107,000 barrels of
oil a day last year, the company said.
Once the country's second-largest producer of natural gas,
Chesapeake has shed billions worth of oil and gas holdings since
Mr. Lawler took the helm in 2013. The moves were designed to help
Chesapeake recover from years of far outspending the amount of
revenue it brought in.
Chesapeake's net debt as of the end of the first quarter was
$9.3 billion. Its debt had swollen to nearly $16 billion in
2012.
The company said it plans to focus on boosting oil production in
Wyoming's Powder River Basin, where it added a fifth drilling rig
this month.
"While we have great natural gas properties, we need still more
oil growth to drive margin improvement and further competitiveness
with our production," Mr. Lawler said.
Write to Rebecca Elliott at rebecca.elliott@wsj.com
(END) Dow Jones Newswires
July 26, 2018 19:29 ET (23:29 GMT)
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