Chesapeake Energy (NYSE:CHK) raised another $6.9 billion on Wednesday by selling off assets in the Permian Basin and elsewhere in an effort to slash the natural gas producer’s hefty debt load.
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Shares of the energy company rose more than 1% in response to the moves, which come just months after raising $4 billion through a trio of deals to unload its midstream pipeline assets.
Chesapeake, which is facing an estimated $10 billion funding gap, said it will use the proceeds to repay $4 billion in debt.
“These transactions are significant steps in the transformation of our company’s asset base to a more balanced portfolio,” CEO Aubrey McClendon said in a statement.
McClendon said Chesapeake has raised $11.6 billion so far this year through asset sales, giving it 85% of its full-year target of $13 billion to $14 billion. He said the company still expects to achieve that goal by the end of the year.
Oklahoma City-based Chesapeake said it has reached deals worth $3.3 billion with three companies to sell the “vast majority” of its Permian Basin assets, which represent 5.7% of the company’s production last quarter.
SWEPI, a subsidiary of Royal Dutch Shell, agreed to acquire assets in the southern Delaware Basin portion of the Permian Basin, while Chevron (NYSE:CVX) is buying assets in the north.
Shell said it is paying $1.94 billion for the 618,000 acres it is acquiring, while Chevron didn’t disclose a price tag on the 264,000 acres it bought.
“These early-in-life, liquids-rich unconventional assets have the potential to be significant future contributors to Chevron's robust North American operations,” Gary Luquette, president of Chevron North America Exploration and Production Company, said in a separate statement.
Chesapeake, which is the No. 2 U.S. natural gas producer behind ExxonMobil (NYSE:XOM), previously announced that Houston-based EnerVest inked a deal to acquire assets in the Midland Basin portion of the region.
Chesapeake said it anticipates the trio of deals will close within 60 days.
Meanwhile, Chesapeake is raising about $3 billion by selling pipeline assets in a series of deals that are seen closing in the third and fourth quarters.
Also, Chesapeake said it is unloading land in Ohio’s Utica shale for about $600 million.
Shares of Chesapeake gained 1.34% to $20.38 Wednesday morning, trimming their 2012 loss to just under 9%.