• 4 minute Hey Oil Bulls - How Long Till Increasing Oil Prices and Strengthening Dollar Start Killing Demand in Developing Countries?
  • 8 minutes Could oil demand collapse rapidly? Yup, sure could.
  • 15 minutes Oil and Trade War
  • 2 hours Could oil demand collapse rapidly? Yup, sure could.
  • 19 hours Are EVs Safer Than Combustion Engine Vehicles?
  • 2 hours U.S. Withdraws From U.N. Human Rights Council
  • 1 hour EU Confirms Trade Retaliation Measures vs. U.S. To Take Effect on June 22
  • 15 hours What If Canada Had Wind and Not Oilsands?
  • 2 hours North Korea, China Discuss 'True Peace', Denuclearization
  • 3 hours Gazprom Exports to EU Hit Record
  • 21 hours Sell out now or hold on?
  • 7 hours Hey Oil Bulls - How Long Till Increasing Oil Prices and Strengthening Dollar Start Killing Demand in Developing Countries?
  • 8 hours EVs Could Help Coal Demand
  • 5 hours WE Solutions plans to print cars
  • 22 hours Nopec Sherman act legislation
  • 21 hours Migrants: Italy Wants EU Border Agency In Africa, Not At Sea
  • 10 hours Lloyd's of London excludes coal
  • 16 hours Oil and Trade War
  • 17 hours Australia mulls LNG import
Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Trending Discussions

Chesapeake Energy to Spin-Off Oil Services Unit

Chesapeake Energy Corp., the second-largest US natural gas producer, has announced plans for a possible spinoff of its oilfield services unit to unload some $1 billion in debt and simplify the company’s corporate structure.

The announcement of the spin-off comes less than a month after Oklahoma City-based Chesapeake make it known it was considering multiple options, including the sale of its oilfield services, as it seeks to cut costs and repair its balance sheet.

Chesapeake would not retain any ownership interest in the spin-off, which will be incorporated under the name of Seventy Seven Energy Inc.  

The company’s oilfield services unit, Chesapeake Oilfield, provides equipment to US onshore exploration and production companies and offers drilling, hydraulic fracturing, oilfield rentals, rig relocation and other services to the industry. The unit reported revenue of around $2.2 billion for 2013.

On Monday, 17 March, when Chesapeake filed the paperwork for the spinoff with the Securities and Exchange Commission (SEC), its stocks fell 0.6% to $24.88. Analysts seem largely optimistic, however, that the spin-off will give the company greater visibility and higher market valuation, while allowing for better streamlining.

Chesapeake has experienced a turnaround over the past year, credited to its new CEO, Doug Lawler, formerly of Anadarko Petroleum Corporation. Lawler replaced Aubrey McClendon who stepped down in January last year, mired in a financial scandal that had unsettled investors.

Stock prices were down and investors were revolting. McClendon actually co-founded the company, but investors didn’t like his track record. Shareholders weren’t fond of McClendon’s management missteps and the company’s stagnating performance. In addition, McClendon had gone on an asset binge, gobbling up US shale basins. But the massive debt he amassed did no favors to Chesapeake. In 2008 we saw the worst of this start to hit when gas prices collapsed and the company was left with tons of assets that they couldn’t develop.

By Charles Kennedy of Oilprice.com


x


Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News