Chesapeake Energy Corporation
) and its partners have inked a definitive purchase and sale
Rice Energy Inc.
) to vend about 22,000 net acres and 12 developed Marcellus wells
in western Greene County, PA. The transaction is valued at about
Chesapeake's move to sell the non-core Marcellus acreage was
commended by analysts. The analysts observed that selling
production at $16.8 thousand per flowing thousand cubic feet
equivalent per day (Mcfe/d) when the c-corp is valued at $9.2
thousand Mcfe/d, is a profitable proposition. They also observed
that the 22,000 net acres represents less than 10% of the company's
approximately 250,000 acres position in the play.
Per the current deal, Chesapeake's south western Marcellus assets
are valued at about $4.5 billion, given 330 MMcfe/d of production.
As of Mar 31, 2014, Rice Energy's deal equates to a 24% increase in
the company's net acreage position and around 152 net risked
locations represents a 47% increase in Marcellus inventory of net
risked locations. The company expects to begin pad-drilling by the
second half of 2015.
The deal, having an effective date of Feb 1, 2014, is projected to
close in Aug 2014, subject to customary closing conditions.
Chesapeake remains a very active player in the industry, managing
asset portfolio through a combination of acquisitions and
disposals. With the biggest inventory of unconventional resource
potential than probably any other domestic independent, Chesapeake
boasts a leading position among the top unconventional liquids-rich
plays, comprising Eagle Ford, Utica, Granite Wash, Cleveland,
Tonkawa, Mississippi Lime and Niobrara and in the Marcellus,
Haynesville/Bossier and Barnett natural gas shale plays.
At present, Chesapeake carries a Zacks Rank #3 (Hold). Meanwhile,
one could consider better-ranked players in the same sector like
Magellan Midstream Partners L.P
), both of which sport a Zacks Rank #1 (Strong Buy).
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CHESAPEAKE ENGY (CHK): Free Stock Analysis
MAGELLAN MDSTRM (MMP): Free Stock Analysis
EQT CORP (EQT): Free Stock Analysis Report
RICE ENERGY INC (RICE): Free Stock Analysis
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