Chesapeake Energy has entered into an agreement to sell the Brazos Valley region of its Eagle Ford asset to WildFire Energy I LLC for $1.425 billion.
'Today marks an important step on our path to exiting the Eagle Ford as we focus our capital on the premium, rock, returns and runway of our Marcellus and Haynesville positions' said Chesapeake President and Chief Executive Officer Nick Dell'Osso. 'We remain actively engaged with other parties regarding the rest of our Eagle Ford position.'
Chesapeake has agreed to sell approx. 377,000 net acres and approx. 1,350 wells in the Brazos Valley region of its Eagle Ford asset, along with related property, plant and equipment. Average net daily production from these properties was approx. 27,700 barrels of oil equivalent (boe) (85% liquid) during the third quarter of 2022. As of December 31, 2021, net proved reserves associated with these properties were approx. 96.8 million barrels of oil equivalent (mmboe).
Chesapeake expects the transaction to close in the first quarter of 2023. The company will receive $1.2 billion upon closing, subject to customary adjustments, with the additional $225 million paid in yearly installments of $60 million over the next three years and $45 million in year four. Chesapeake anticipates the proceeds will be used to repay borrowings under its revolving credit facility and be available for its share repurchase program.
RBC Capital Markets, Citi, and Evercore are serving as financial advisors, Haynes and Boone, LLP is serving as legal advisor, and DrivePath Advisors is serving as communications advisor to Chesapeake.
Source: Chesapeake Energy
