A report suggests that Oklahoma City’s Chesapeake Energy Corp. is one of two firms reportedly interested in acquiring Alta Resources of Houston just a few months after emerging from bankruptcy.
Bloomberg reported that Alta Resources, a closely held natural gas explorer drew the interest of potential buyers. Chesapeake Energy and EQT Corp. were among those said to be making inquiries about the possibilities of an acquisition. Bloomberg quoted “people familiar with the matter.”
Chesapeake recently emerged from Chapter 11 bankruptcy so the reported interest in the acquisition could be considered surprising in some aspects. However, after emergence, Chesapeake leaders stated their new business plan would no longer continue with a recent push into crude oil and instead would return to the firm’s original emphasis on natural gas.
The Oklahoma company, known for its natural gas exploration and EQT are said to be considering offers that could value Alta at more than $3 billion.
Alta’s backers include the credit arm of Blackstone Group Inc. The company is also reportedly working with an adviser on the potential sale.
Chesapeake Energy is not commenting about the report. Neither is EQT.
Chesapeake was once the second-largest natural gas producer in the country but its decision to invest in oil led the company on a path to heavy debt and eventually bankruptcy. It was two years ago the firm paid $4 billion on the acquisition of WildHorse Resource Development, hoping to capitalize on high oil prices. But oil prices took a plunge after the deal was finalized.
In February, Chesapeake Executive Doug Lawler stated the company’s new efforts would be to focus 85% of the 2021 capital expenditures on gas fields in Louisiana and in the Northeast where it made its name and fortune years ago.
Lawler explained the company planned to spent between $700 million and $750 million a year on new projects that potentially could generate $400 in annual free cash flow.