Chesapeake Energy is in talks with four potential bidders for a $500 million stake in its Barnett Shale properties in North Texas, the company said Wednesday.

Oklahoma City-based Chesapeake also has letters of intent to put about $1 billion of gas-processing assets into a joint venture, Chief Financial Officer Marc Rowland said at an investors conference in Austin. Rowland didn’t identify potential partners or bidders. The deals would continue a string of transactions that the company has done, all generally aimed at providing it with additional cash or reducing future expenses at a time when Chesapeake and other producers are struggling to manage low energy prices and tight credit.

Deals "imminently about to close" include a so-called volumetric production payment of $500 million on Barnett Shale properties. Volumetric production payments call for a buyer to pay a fixed price upfront for a certain amount, or volume, of production from a particular property. Last year, Chesapeake did three similar deals for a total of $1.6 billion.

It has done other transactions in which it sells a share of its holdings for cash, in exchange for its partner shouldering a large share of future capital spending. The biggest of these deals was a $3.4 billion agreement last year with StatoilHydro in Appalachia’s Marcellus Shale, and it has similar agreements with BP in the Fayetteville Shale in Arkansas and with Plains Exploration and Production in the Haynesville Shale in Louisiana.

Chesapeake had said in February that it was in talks with several major oil companies about a possible joint venture in the Barnett Shale.

In addition to the volumetric production deals, Chesapeake is also about to sell $300 million of other unidentified assets, Rowland said.

Chesapeake has 700 employees working in the Barnett, where it has about 1,350 producing wells. Chesapeake’s Donna Ray No. 1-H well in Johnson County has been yielding an average of 9.6 million cubic feet of gas per day for 30 days, ranking it among the most prolific wells in the shale play.

Chesapeake is producing the equivalent of about 640 million cubic feet of natural gas daily in the Barnett, where it has about 20 rigs drilling. In 2008, it was the No. 3 producer in the area, behind No. 1 Devon Energy and No. 2 XTO Energy, according to the Texas Railroad Commission.

As of last week, there were 77 rigs drilling for gas in the Barnett Shale, including 31 in Tarrant County and 12 each in Johnson and Wise counties. Barnett Shale activity accounts for more than 10 percent of onshore gas drilling in the United States.

Chesapeake said May 4 that it might sell as much as $2 billion of assets this year and $1.5 billion next year to raise cash and reduce debt after natural gas prices fell and it curtailed production. Chesapeake’s shares (ticker: CHK) rose 1.5 percent, or 33 cents, to $21.98 on Wednesday.

Staff writer Jack Z. Smith contributed to this report, which includes material from Bloomberg News


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