Chesapeake Energy to Sell Second Haynesville Acreage in Louisiana for $465 Million

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Chesapeake Energy Corporation announced Tuesday that it will sell another portion of its Haynesville Shale operating area in northern Louisiana for approximately $465 million to an affiliate of Covey Park Energy LLC, according to a company press release.

The sale covers nearly 41,500 acres and 326 operated and non-operated wells currently producing approximately 50 million cubic feet (mmcf) of gas per day.

“We are pleased with the results of our non-core Haynesville sales packages, totaling projected gross proceeds of $915 million, while divesting of only approximately 80 mmcf of daily gas production and approximately $50 million of estimated 2017 operating income,” said Doug Lawler, Chesapeake’s Chief Executive Officer. “Upon closing, this strong bid for our second Haynesville package, along with our recent new issue and tender, will position Chesapeake with significant liquidity as we begin a new year.”

OK Energy Today reported Chesapeake’s $450 million dollar sale involving nearly 78,000 acres on December 5. The energy company has bounced back lately with a well-executed series of non-core asset divestitures resulting in a significant cash infusion.

“Chesapeake delivered on its strategy and achieved our stated financial and operational objectives in 2016,” said Lawler. “We exceeded our 2016 asset sales goal by approximately $500 million, bringing total gross proceeds from divestitures either signed or closed in the year to approximately $2.5 billion, excluding certain volumetric production payment repurchase transactions. We will continue to pursue opportunities to strengthen our balance sheet in 2017.”

The company expects to close the latest transaction in the first quarter of 2017.

 

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