Blog Coverage Chesapeake Energy Announced Haynesville Asset Sale for $465 Million

Upcoming AWS Coverage on FieldPoint Petroleum Post-Earnings Results

LONDON, UK / ACCESSWIRE / December 21, 2016 / Active Wall St. blog coverage looks at the headline from Chesapeake Energy Corp. (NYSE: CHK) as the Company announced on December 05th, 2016, that it has signed an agreement to sell a portion of its acreage and producing properties in its Haynesville Shale operating area in northern Louisiana for approximately $465 million to an affiliate of Covey Park Energy LLC. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

One of Chesapeake Energy’s competitors within the Independent Oil & Gas space, FieldPoint Petroleum Corp. (NYSE: FPP), reported on November 14, 2016, its financial results for the third quarter, ended September 30, 2016. AWS will be initiating a research report on FieldPoint Petroleum in the coming days.

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The oil and gas exploration Company stated that the sale includes approximately 41,500 net acres and 326 operated and non-operated wells, which are currently producing approximately 50 million cubic feet (MMcf) of gas per day. The Company expects this transaction to close in Q1 2017. With the announcement of the transaction, Chesapeake has brought the total Haynesville divestiture proceeds to $915 million after the company announced on December 05th, 2016, that it would sell a portion of its assets in the play to a private Company for $450 million.

Doug Lawler, Chesapeake’s Chief Executive Officer, commented:

“We are pleased with the results of our non-core Haynesville sales packages, totaling projected gross proceeds of $915 million, while divesting of only approximately 80 MMcf of daily gas production and approximately $50 million of estimated 2017 operating income. Upon closing, this strong bid for our second Haynesville package, along with our recent new issue and tender, will position Chesapeake with significant liquidity as we begin a new year.”

Covey Angle

The Chesapeake deal is also the latest Haynesville Shale foray for Dallas-based Covey Park. In March 2016, the Company picked up assets in the Haynesville and Bossier shale plays from EP Energy for $420 million in cash for more than 34,000 acres of shales. In November 2016, affiliates of Covey Park Energy announced the acquisition of additional assets located in the Haynesville/Bossier shale areas of East Texas and North Louisiana. The assets are located primarily in Panola, Nacogdoches and San Augustine counties in Texas, and DeSoto, Bossier, and Sabine Parishes in Louisiana, and consist of approximately 139,000 gross and 90,000 net acres with average net production of 35 MMcf/day.

The Debt Reduction Program

For its Q3 2016 earnings results Chesapeake Energy reported principle debt balance as of September 30, 2016, of approximately $8.7 billion, including approximately $240 million of borrowings outstanding on the company’s revolving credit facility, compared to $9.7 billion as of December 31, 2015, and $11.7 billion as of September 30, 2015.

Chesapeake Energy stated that with its second sale in Haynesville and its previously announced Devonian asset divestiture, puts the Company well ahead of its planned $2 billion asset sale goal, bringing total gross proceeds from divestitures either signed or closed in the year to approximately $2.5 billion, excluding certain volumetric production payment repurchase transactions. The Company stated that it will continue to pursue opportunities to strengthen its balance sheet in 2017.

Stock Performance

On Tuesday, the stock closed the trading session at $7.29, marginally down 0.27% from its previous closing price of $7.31. A total volume of 39.89 million shares have exchanged hands. Chesapeake Energy’s stock price advanced 22.73% in the last month, 8.16% in the past three months, and 61.64% in the previous six months. Furthermore, on a year-to-date basis, the stock skyrocketed 62.00%. The stock currently has a market cap of $6.33 billion.

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