Chesapeake Energy Corporation (NYSE:CHK) today announced that it has signed an agreement to sell a portion of the company’s acreage and producing properties in its Haynesville Shale operating area in northern Louisiana for approximately $450 million to a private company. Included in the sale are approximately 78,000 net acres, 40,000 net acres of which the company considered as core acreage. The sale also includes 250 wells currently producing approximately 30 million cubic feet of gas per day, net to Chesapeake. The company expects this transaction to close in the 2017 first quarter.
In addition, Chesapeake is marketing approximately 50,000 net acres located in the northeastern part of its Haynesville Shale operating area, which the company also expects to close in the 2017 first quarter. Following both of these planned divestitures, Chesapeake will retain approximately 250,000 net acres in the core of the Haynesville Shale. The company’s 2017 development program in the Haynesville will be focused on longer laterals and further enhanced completions, resulting in projected adjusted production growth of approximately 13% from its Haynesville operations in 2017.
Doug Lawler, Chesapeake’s Chief Executive Officer, commented, “We are pleased to announce the first of two proposed Haynesville asset sales for $450 million. With this proposed transaction and our previously announced Devonian asset divestiture, the company has reached approximately $2.0 billion gross proceeds from divestitures either signed or closed in 2016, excluding certain volumetric production payment repurchase transactions. We expect this total to grow in the 2017 first quarter with our second proposed acreage sale in the Haynesville. With our long-term target of $2 to $3 billion in debt reduction, we will continue to look for opportunities to accelerate value through the sale of additional non-core assets in 2017 and beyond. Through the continual optimization of our asset base, reduction in our net leverage, improvement in liquidity and cash flow generating capabilities, we believe Chesapeake is well positioned for the years ahead.”