Big shout out to Marcellus EF! which are helping drive Chesapeake out of the area!
Cross Posted from NPR
The nation’s second-largest natural gas producer, Chesapeake Energy Corp., is trying to reassure investors it can rein in costs and cover a budget shortfall.
According to Reuters, the company will market acreage in the Marcellus region, in order to focus more on its core drilling operations in Texas:
Investors took control of the Chesapeake board in June. Reining in spending is now a top priority for the company, which faces a gap of about $4 billion this year between its expected cash flow and capital expenditures.
To help cover that shortfall, Chesapeake has pledged to sell up to $7 billion in oil and gas properties this year. So far, it has closed or signed deals totaling $1.5 billion, Dixon said, adding that there has been good interest in some of the company’s smaller asset packages.
Chesapeake has appointed a new interim CEO, Steve Dixon, to lead the company while it searches for a permanent replacement.
The company’s previous CEO, Aubrey McClendon, stepped down April 1. He is being formally investigated by the Securities and Exchange Commission for a controversial financial perk that allowed him to personally invest in the company’s oil and gas wells.
StateImpact reporters in Texas, Oklahoma, and Pennsylvania teamed up to explain more about Chesapeake’s financial troubles and McClendon’s controversial role at the company last spring.
EF! DAM
Ecodefense
Not sure that they’re selling *all their acreage* but $7 billion would probably come pretty close to the value of their holdings. Here’s hoping they’re leaving completely.
Just an FYI, I found this in their 10-K SEC Filing. It doesn’t necessarily mean they’re abandoning the Marcellus. They have leases in some pretty unproductive areas of the shale that they’re probably trying to dump. It’s nice to see them start to forfeit their game plan though!:
http://www.sec.gov/Archives/edgar/data/895126/000089512613000076/chk-2012123110k.htm
Planned Sales
We anticipate completing the sale of nearly all of our remaining midstream business, including our Mid-Continent gathering systems and other assets, in the 2013 first half.
In addition to the Mississippi Lime joint venture discussed under Recent Developments, we have other natural gas and oil assets currently for sale, including our northern Eagle Ford assets and various portions of our Marcellus and Utica leasehold in Pennsylvania and Ohio that we consider non-core.
We do not have binding agreements for all of our planned asset sales and our ability to consummate each of these transactions is subject to changes in market conditions and other factors beyond our control.
Appreciate your comments. Have altered the headline accordingly 🙂
Recent sales by CHK haven’t lived up to the “asking price”. Sale of their midstream subsidiary went for about 1/2 of what CHK wanted, same with the Mississippi Lime basin. As far as I know, they are having difficulty in finding buyers for Ohio acreage.
My best guess, is the $7-billion for Marcellus will turn out to be around $3-4 billion – IF CHK can find a buyer.
CHK is not the only NG corporation having problems with finances, and many are also looking to dump acreage.