• 4 minutes Is The Three Gorges Dam on the Brink of Collapse?
  • 8 minutes The Coal Industry May Never Recover From The Pandemic
  • 11 minutes China Raids Bank and Investor Accounts
  • 7 mins Sources confirm Trump to sign two new Executive orders.
  • 42 mins CV19: New York 21% infection rate + 40% Existing T-Cell immunity = 61% = Herd Immunity ?
  • 6 hours In a Nutshell...
  • 14 hours Why Wind is pitiful for most regions on earth
  • 34 mins No More Love: Kanye West Breaks With Trump, Claims 2020 Run Is Not A Stunt
  • 16 mins A Real Reality Check on "Green Hydrogen"
  • 1 day During March, April, May the states with the highest infections/deaths were NY, NJ, Ma. . . . . Today (June) the three have the best numbers. How ? Herd immunity ?
  • 16 hours Why Oil could hit $100
  • 24 mins Better Days Are (Not) Coming: Fed Officials Suggest U.S. Recovery May Be Stalling
  • 10 mins Putin Paid Militants to Kill US Troops
  • 2 days Coronavirus hype biggest political hoax in history
  • 4 days Joe Biden to black radio host, "If you don't vote for me you ain't black". That's our Democratic Party nominee ?
James Burgess

James Burgess

James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…

More Info

Chesapeake Sells Assets to Help Reduce Long-Term Debts of $10.6 Billion

With natural gas prices at a ten year low many nat gas producers are struggling to make any profits. Chesapeake Energy Corp. has found itself with mounting debts and has therefore sold off $2.6 billion worth of assets in attempt to raise cash.

Chesapeake was the second largest producer of natural gas in America, but moved away from extracting more gas as the prices fell; instead it is now concentrating on reducing its $10.6 billion of long-term debt.

Chesapeake has been following a strategy to raise its production levels of natural gas liquids, which have become more profitable due to their demand in the production of plastics. However despite this it recently sold its interest in the liquids-rich Cleveland and Tonkawa plays in Oklahoma to a group of investors led by an affiliate of the Blackstone Group for $1.3 billion.

They have also agreed the upfront sale of natural gas produce over the next 10 years to an affiliate of Moran Stanley, worth $745 million. The price is based upon a rate of $4.68 per thousand cubic feet, more than double the current market rate, but the buyer obviously believes that natural gas prices will climb drastically in the next 10 years.

A massive 58,400 acres of leases in the Texoma Woodford play in Oklahoma has also been sold to XTO Energy, a part of Exxon Mobil, for $590 million. Aubrey McCLendon, CEO of Chesapeake, justified the sale by stating that, “the Texoma Woodford play is non-strategic to Chesapeake, and we are happy to unlock the value in these assets for our shareholders.”

If Chesapeake can continue to raise similar levels of capital with the sales of non-vital assets, it will easily be able to keep its long-term debts under control.

By. James Burgess of Oilprice.com



Join the discussion | Back to homepage



Leave a comment

Leave a comment

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