Oklahoma City-based Chesapeake, the nation’s second-largest gas producer behind Exxon Mobil (XOM), said the deal is valued at around $1 billion and brings its year-to-date asset sales to about $3.6 billion.
Chesapeake has said it was looking to sell between $4 billion and $7 billion in assets this year to fill the gap between its cash flow and planned spending. The company has long-term debt of $13.4 billion and a $3.5 billion funding gap this year.
On Wednesday, Chief Executive Doug Lawler said the latest deal will allow the company to fully find its 2013 capital spending budget.
“Additional asset sales contemplated for later this year may reduce long-term debt and further enhance our financial liquidity,” he said in a statement.
Exco will receive 55,000 net acres in the Northern Eagle Ford shale, including 120 producing wells in Texas. Those wells averaged about 6,100 barrels of oil equivalent in May.
The company will also acquire Chesapeake’s interests in about 9,600 net acres in the Haynesville shale, which spans Louisiana, Texas and Arkansas. The Haynesville assets, which include 11 units operated by Chesapeake and 42 units operated by Exco, reported average daily production of about 114 million cubic feet of natural gas equivalent in May.
Chesapeake noted that the impact of its asset sales on net production and capital expenditures was reflected in its May 1 outlook.
Shares of Chesapeake were up three cents at $20.95 in pre-market trading. Exco shares closed Tuesday at $7.44 and were inactive pre-market.