Chesapeake Energy Corp. (NYSE: CHK) announced it has completed the sale of its previously announced asset packages in the Permian Basin. The company sold its southern Delaware Basin assets in the Permian Basin to SWEPI LP, a subsidiary of Royal Dutch Shell plc (NYSE: RDS.B); its northern Delaware Basin portion of the Permian Basin to Chevron U.S.A. Inc., a subsidiary of Chevron Corp. (NYSE: CVX); and its producing assets in the Midland Basin portion of the Permian Basin to affiliates of Houston-based EnerVest Ltd. The Permian Basin assets sold produced approximately 21,000 bbl of liquids and 90 MMcf of natural gas per day during the 2012 second quarter, or approximately 5.7% of Chesapeake’s production during the quarter.
Total combined net proceeds from the three transactions, inclusive of preferential rights exercised by other parties, are approximately $3.3 billion, of which Chesapeake received approximately $2.8 billion in cash at closing. Payment of the remaining proceeds will be subject to certain title, environmental and other standard contingencies. With the net proceeds from the Permian transactions along with various other asset sale proceeds, the company will reduce the total outstanding balance on its existing term loans from $4 billion to approximately $1.2 billion by the end of October 2012. The company plans to fully repay the term loans by year-end 2012.
Jefferies & Company Inc. and Goldman, Sachs & Co. served as financial advisors to Chesapeake regarding the Permian Basin asset sales.
Recommended Reading
Fracturing’s Geometry Test
2024-02-12 - During SPE’s Hydraulic Fracturing Technical Conference, industry experts looked for answers to their biggest test – fracture geometry.
Going with the Flow: Universities, Operators Team on Flow Assurance Research
2024-03-05 - From Icy Waterfloods to Gas Lift Slugs, operators and researchers at Texas Tech University and the Colorado School of Mines are finding ways to optimize flow assurance, reduce costs and improve wells.
Drilling Tech Rides a Wave
2024-01-30 - Can new designs, automation and aerospace inspiration boost drilling results?
8 Rivers, Casale Partner to Advance Hydrogen Technology
2024-01-17 - The CO2 convective reformer will enable 8 Rivers’ 8RH2 technology to capture nearly all CO2 as part of its process, the company says.
The Completions Package: NextTier, ProPetro Electrify Frac Fleets
2024-01-16 - NexTier and ProPetro’s respective electric frac fleets are touting a newer, cheaper and more sustainable approach to hydraulic fracturing through electrification.