Chesapeake Taps Banker to Sell Oil-Rich Eagle Ford Assets

Print 🖨

(Bloomberg) Chesapeake Energy Corp. has chosen Evercore to help offload its assets in the Eagle Ford Shale of South Texas, with an auction expected to launch after next month’s US Labor Day holiday, according to people with knowledge of the situation.The assets could go for as much as $3.25 billion, said the people, who asked not to be identified because the matter is private.Chesapeake, which found fame a decade ago under the leadership of wildcatter Aubrey McClendon, had announced plans to retreat from oil and focus on the gas-rich Haynesville shale in Louisiana and the Marcellus shale in the US Northeast.

It’s the latest strategic shift for Chesapeake, which rode a wave of surging gas prices after cutting roughly $7.8 billion in debt through bankruptcy last year. The Oklahoma City-based company booked $1.24 billion in net income for the second quarter, compared to a loss of $439 million in the same period a year ago.

Chesapeake and Evercore declined to comment.

No ‘Fire Sale’

Chesapeake Chief Executive Officer Nick Dell’Osso said there won’t be a “fire sale” and added that the company’s large position in the Eagle Ford may entail multiple transactions, according to an earnings call on Aug. 3.

ROO.AI Oil and Gas Field Service Software

The company has roughly 610,000 net acres in the Eagle Ford, with a net production of 88,000 barrels of oil equivalent per day at quarter-end.

Those sales are expected to generate billions of dollars of proceeds that will be used to boost the company’s plans to return capital to investors. Chesapeake bought back roughly $670 million of common shares this year through July.

The company was working with advisers to sell Eagle Ford assets for as much as $2 billion back in April 2021, people familiar with the plan told Bloomberg News at the time.

Chesapeake shares traded at around $100 on Tuesday, up from $90.25 on Aug. 2, when it reported second-quarter results.