Chesapeake Energy Corporation Announces Sale of Northern Eagle Ford and Haynesville Shale Assets for Aggregate Proceeds of $1 Billion - PRESS RELEASE July 3, 2013, 7:06 a.m. ET
http://online.wsj.com/article/PR-CO-20130703-903790.html
OKLAHOMA CITY--(BUSINESS WIRE)--July 03, 2013--
Chesapeake Energy Corporation (NYSE:CHK) announced the execution of agreements to sell assets in the Northern Eagle Ford Shale and Haynesville Shale to EXCO Operating Company, LP a subsidiary of EXCO Resources, Inc. (NYSE:XCO) ("EXCO") for aggregate proceeds of approximately $1.0 billion, of which approximately 90% will be received upon closing. Payment of the remaining proceeds will be subject to customary post-closing contingencies. The transactions, which are subject to certain closing conditions, are expected to close in the 2013 third quarter.
In the Northern Eagle Ford Shale, EXCO has agreed to acquire approximately 55,000 net acres in Zavala, Dimmit, La Salle and Frio counties, Texas, including approximately 120 producing wells with average net daily production of approximately 6,100 barrels of oil equivalent during the month of May.
In the Haynesville Shale, EXCO has agreed to acquire Chesapeake's operated and non-operated interests in approximately 9,600 net acres in Desoto and Caddo parishes, Louisiana. Included in the transaction are 11 units operated by Chesapeake and 42 units operated by EXCO. Average net daily production from the Haynesville properties to be sold was approximately 114 million cubic feet of natural gas equivalent during the month of May.
The impact of these asset sales on net production and capital expenditures was previously reflected in Chesapeake's May 1, 2013, Outlook guidance.
Doug Lawler, Chesapeake's Chief Executive Officer, commented, "Today's announcement brings our year-to-date asset sales signed or closed to approximately $3.6 billion, which, combined with forecasted net operating cash flow, enables Chesapeake to fully fund its 2013 capital expenditure budget. Additional asset sales contemplated for later this year may reduce long-term debt and further enhance our financial liquidity."
Jefferies & Company, Inc. is acting as financial advisor to Chesapeake.
CONTACT: Chesapeake Energy Corporation
Jeffrey L. Mobley, CFA, 405-767-4763
jeff.mobley@chk.com
Views: 2630
Replies to This Discussion
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Permalink Reply by GoshDarn on
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So, CHK. Make the money on the flip (i.e., on the deal).
Just wish they'd find a buyer and flip their Ashland, La., leases, etc.
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Permalink Reply by Henry on -
The markets seem to think XCO got a good deal here - XCO stock was up over 8% yesterday. CHK cannot be making great money on any of these deals. The entire world knows that CHK must sell assets to raise cash. No one would overpay for those assets, knowing CHK's desperation to sell..
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Permalink Reply by jffree1 on
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Exco/Harbinger deal explained :
Exco Resources: On The Offensive After A 2-Year Hiatus
The details of the Harbinger transaction are as follows:
The Partnership holds conventional oil and natural gas assets previously owned by EXCO in West Texas, including and above the Canyon Sand formation, as well as in the Danville, Waskom, Holly and Vernon fields in East Texas and North Louisiana, including and above the Cotton Valley formation. Under the terms of the definitive agreements announced on November 5, 2012, the Partnership acquired the oil and natural gas assets from EXCO for $725 million of total consideration. The purchase by the Partnership was funded with approximately $225 million of bank debt, $348.3 million (after preliminary closing adjustments) in cash contributed from HGI and$119.2 million (after preliminary closing adjustments) in oil and natural gas properties and related assets being contributed by EXCO. EXCO has a 50% interest in the general partner of the Partnership and a 24.5% limited partnership interest in the Partnership. After giving effect to the 2% general partner interest in the Partnership, EXCO and HGI own an economic interest in the Partnership of 25.5% and 74.5%, respectively. The Partnership will be governed by a Board of Directors of the general partner consisting of two EXCO directors and two HGI directors. EXCO will continue to manage and operate the assets as contract operator of the properties and provide services pursuant to contract operating and administrative service agreements with the Partnership.
The partnership also added assets in East Texas and North Louisiana for $132.5 million from BG group PLC, Exco's partner on the TGGT midstream assets.
http://seekingalpha.com/article/1556432-exco-resources-on-the-offen...
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