Natural gas provider,
Chesapeake Energy Corporation
) has entered into a definitive agreement to sell its assets in
the Northern Eagle Ford Shale and Haynesville Shale to EXCO
Operating Company, LP a subsidiary of
EXCO Resources, Inc.
CHESAPEAKE ENGY (CHK): Free Stock Analysis
OASIS PETROLEUM (OAS): Free Stock Analysis
EXCO RESOURCES (XCO): Free Stock Analysis
EXXON MOBIL CRP (XOM): Free Stock Analysis
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Chesapeake would dispose the assets for approximately $1 billion,
of which approximately 90% will be received upon closing. Payment
of the remaining proceeds is subject to customary post-closing
contingencies. The transaction is expected to close in the third
quarter of the ongoing fiscal.
The Northern Eagle Ford Shale assets to be sold comprise
approximately 55,000 net acres in Zavala, Dimmit, La Salle and
Frio counties, Texas. The area includes approximately 120
producing wells with average net daily production of
approximately 6,100 barrels of oil equivalent during the month of
In the Haynesville Shale, the company will dispose 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 May.
Chesapeake Energy is an independent oil and gas company engaged
in the development, exploration, acquisition and production of
onshore natural gas and oil reserves. The company owns interests
in producing oil and gas wells concentrated in three primary
operating areas: the Mid-Continent region of Oklahoma, western
Arkansas, southwestern Kansas and the Texas Panhandle; the Gulf
Coast region; and the Helmet area of northeastern British
Columbia. Chesapeake is the second largest U.S. natural gas
The company currently retains a Zacks Rank #2 (Buy), implying
that it is expected to perform better than the broader U.S.
equity market over the next 1 to 3 months. Other stocks that are
also expected to outperform the equity market include Zacks
Ranked #1 (Strong Buy)
Oasis Petroleum Inc.