OKLAHOMA CITY, Dec. 5, 2016 /PRNewswire/ -- 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."
Headquartered in Oklahoma
City, Chesapeake Energy Corporation's (NYSE: CHK) operations
are focused on discovering and developing its large and
geographically diverse resource base of unconventional oil and
natural gas assets onshore in the United States. The company
also owns oil and natural gas marketing and natural gas gathering
and compression businesses.
This news release and the accompanying Outlook include
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements are statements
other than statements of historical fact. They include statements,
but are not limited to, the anticipated timing and proceeds from
asset sales, if any, as well as the effect of such assets sales on
our ability to optimize our asset base, further reduce outstanding
debt and grow production in 2017. Although we believe the
expectations and forecasts reflected in the forward-looking
statements are reasonable, we can give no assurance they will prove
to have been correct. They can be affected by inaccurate or changed
assumptions or by known or unknown risks and uncertainties.
Factors that could cause actual results to differ materially
from expected results include those described under "Risk Factors"
in Item 1A of our annual report on Form 10-K and any updates to
those factors set forth in Chesapeake's subsequent quarterly
reports on Form 10-Q or current reports on Form 8-K (available at
http://www.chk.com/investors/sec-filings). These risk factors
include the volatility of oil, natural gas and NGL prices; the
limitations our level of indebtedness may have on our financial
flexibility; our inability to access the capital markets on
favorable terms or at all; the availability of cash flows from
operations and other funds to finance reserve replacement costs or
satisfy our debt obligations; a further downgrade in our credit
rating requiring us to post more collateral under certain
commercial arrangements; write-downs of our oil and natural gas
asset carrying values due low commodity prices; our ability to
replace reserves and sustain production; uncertainties inherent in
estimating quantities of oil, natural gas and NGL reserves and
projecting future rates of production and the amount and timing of
development expenditures; our ability to generate profits or
achieve targeted results in drilling and well operations; leasehold
terms expiring before production can be established; commodity
derivative activities resulting in lower prices realized on oil,
natural gas and NGL sales; the need to secure derivative
liabilities and the inability of counterparties to satisfy their
obligations; adverse developments or losses from pending or future
litigation and regulatory proceedings, including royalty claims;
charges incurred in response to market conditions and in connection
with our ongoing actions to reduce financial leverage and
complexity; drilling and operating risks and resulting liabilities;
effects of environmental protection laws and regulation on our
business; legislative and regulatory initiatives further regulating
hydraulic fracturing; our need to secure adequate supplies of water
for our drilling operations and to dispose of or recycle the water
used; impacts of potential legislative and regulatory actions
addressing climate change; federal and state tax proposals
affecting our industry; potential OTC derivatives regulation
limiting our ability to hedge against commodity price fluctuations;
competition in the oil and gas exploration and production industry;
a deterioration in general economic, business or industry
conditions; negative public perceptions of our industry; limited
control over properties we do not operate; pipeline and gathering
system capacity constraints and transportation interruptions;
terrorist activities and cyber-attacks adversely impacting our
operations; potential challenges of our spin-off of Seventy Seven
Energy Inc. (SSE) in the event of a bankruptcy of SSE; an
interruption in operations at our headquarters due to a
catastrophic event; the continuation of suspended dividend payments
on our common stock and preferred stock; certain anti-takeover
provisions that affect shareholder rights; and our inability to
increase or maintain our liquidity through debt repurchases,
capital exchanges, asset sales, joint ventures, farmouts or other
means.
Expected asset sales may not be completed in the time frame
anticipated or at all. We caution you not to place undue
reliance on our forward-looking statements, which speak only as of
the date of this news release, and we undertake no obligation to
update any of the information provided in this release or the
accompanying Outlook, except as required by applicable law.
INVESTOR
CONTACT:
|
MEDIA
CONTACT:
|
Brad Sylvester,
CFA
|
Gordon
Pennoyer
|
(405)
935-8870
|
(405)
935-8878
|
ir@chk.com
|
media@chk.com
|
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SOURCE Chesapeake Energy Corporation