BY JOHN-LAURENT TRONCHE August 12, 2008

Chesapeake CEO Aubrey K. McClendon announced the company will sell 25 percent of its interest in the Fayetteville and Marcellus shale plays. Upon completion of a previously announced $1.7 billion sale of Arkoma Basin Woodford Shale acreage, Chesapeake Energy Corp.’s CEO said the company would seek to sell 25 percent of its interest in the Fayetteville and Marcellus shale plays.

“We anticipate selling 25 percent of our interest in those two plays using a ‘PXP-style’ transaction in which we receive partial consideration in cash at closing and then receive a tax-efficient carry of development costs over time as wells are drilled,” said CEO Aubrey K. McClendon in a statement. “There is strong industry interest in both plays and also in our preferred deal structure. Accordingly, we hope to announce transaction details by the end of the third quarter.”

The Oklahoma City-based company currently holds 550,000 acres in the Fayetteville Shale, located in about 13 eastern Arkansas counties, and about 1.7 million acres in the Marcellus Shale, which runs from New York through Pennsylvania and down into West Virginia.

The company offloaded its Woodford Shale acreage in order to raise cash to fund its continuing operations in the Barnett, Haynesville and Marcellus shale plays.

Shares of the company, traded under CHK on the New York Stock Exchange, are trading around $45, up about 15 percent for the year. Shares have been as high as $74, but have dropped in past months, as have most other natural gas companies’ shares.


OKLAHOMA CITY - Chesapeake Energy Corp. said Tuesday it closed the sale of its Arkoma Basin Woodford Shale assets to BP America Inc. for about $1.7 billion cash.

"This transaction was an important aspect of our ongoing asset monetization program and enables Chesapeake to redeploy capital to our Haynesville, Barnett and Marcellus Shale plays and further improves the company's capital structure," Aubrey K. McClendon, Chesapeake's chief executive officer, said in a statement.

McClendon said Chesapeake said it now plans to sell 25 percent of its interest in the Fayetteville and Marcellus Shale areas.