Chesapeake Energy has agreed to sell assets in the Southern Marcellus Shale and a portion of the Eastern Utica Shale in West Virginia, US, to Southwestern Energy for $5.375bn.
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.
The properties, which produced around 56,000bpd in September, features 184,000Mcf of gas, 20,000 barrels of natural gas liquids and 5,000 barrels of condensate.
Net proved reserves associated with the properties were around 221 million barrels of oil equivalent as of 31 December 2013.
The transaction is expected to be completed in the fourth quarter of 2014.
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By GlobalDataChesapeake CEO Doug Lawler said: "Today’s announcement marks a major step in Chesapeake’s transformation and a dramatic improvement in our financial strength, as we seek to maximise value for our shareholders.
"It’s important to note that this transaction has no impact on our expected growth profile or on our views around maintaining a disciplined capital programme.
"We expect our full-year production guidance for 2015 to remain in the range of 7%-10% growth from 2014 levels adjusted for asset sales."
Southwestern will also assume a portion of Chesapeake’s firm transportation and processing capacity commitments.
The company plans to start with four to six rigs in 2015 and increase to 11 rigs by 2017. The company will maintain the 11-rig pace for around 20 years.
Southwestern Energy president and CEO Steve Mueller said: "Southwestern already has leading positions in two world-class projects in our Fayetteville shale and north-eastern Pennsylvania Marcellus assets, and both will continue delivering highly economic production and reserve growth for many years.
"With this acquisition, we will have secured a complementary third premier acreage position.
"The early drilling in both the liquids-rich Marcellus and emerging Utica plays has confirmed the resource potential and the economic strength of a long-term development programme."
Image: Southwestern Energy will acquire 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.
