Chesapeake Energy has sold its assets in the Southern Marcellus Shale and a portion of the Eastern Utica Shale in West Virginia, US, to Southwestern Energy for $4.975bn.
The $400m adjustment to the earlier reported $5.375bn sale price is attributable to a settlement for several items, including Southwestern Energy’s waiver of any future claims associated to title defects and environmental liabilities.
The oil and gas assets included in the transaction cover around 413,000 net acres and around 1,500 wells in northern West Virginia and southern Pennsylvania, along with associated property, plants, and equipment.
Of the total wells, 435 are located in the Marcellus and Utica formations.
Net production of the divested properties in mid-December was about 57,000 barrels of oil equivalent (boe) per day.
Southwestern Energy chairman and chief executive officer Steve Mueller said: "We believe this is a transformational transaction for the company and we are excited to begin development of this new asset as we continue our focus on creating value for our shareholders."
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By GlobalDataChesapeake Energy chief executive officer Doug Lawler said: "With the closing of this transaction and the available borrowing capacity under our unsecured revolving credit facility, Chesapeake now has a liquidity position of approximately $9 billion.
"This puts Chesapeake in an advantageous position to enhance shareholder value in this volatile commodity price market."
Chesapeake Energy has authorized a $1bn common stock repurchase programme.
Image: Southwestern Energy acquired Chesapeake Energy’s assets in the Southern Marcellus Shale, and a portion of the Eastern Utica Shale in West Virginia. Photo: courtesy of Southwestern Energy.
