Chesapeake Energy Corp. continues to shed assets that don’t fit with its new operational strategy.
The Oklahoma City-based oil and natural gas producer and its partners are selling about 22,000 net acres in southwest Pennsylvania to Rice Energy Inc. for about $336 million.
“As we continue to focus on improving our operational efficiencies and selling noncore assets, this transaction aligns with our business strategies of financial discipline and profitable and efficient growth from captured resources,” Chesapeake spokesman Gordon Pennoyer said.
Chesapeake acknowledged in May that it had reached an agreement to sell a Pennsylvania acreage package with “minimal” associated production.
The deal will increase Pennsylvania-based Rice Energy’s acreage position in the Marcellus Shale by nearly 25 percent, while boosting its drilling inventory by more than 150 locations.
“This transaction is consistent with our strategy of acquiring high-quality shale assets,” CEO Toby Rice said. “We are adding a significant number of drilling locations within an area we have been successfully developing since 2009.
“The acquired assets provide us with a foothold to pursue additional leasehold opportunities and further grow our inventory of low-risk, high-return projects.”
The acreage being acquired by Rice Energy includes seven wells that produce about 20 million cubic feet of natural gas equivalent a day. Five additional wells are in various stages of development.
Chesapeake also has struck deals to sell acreage in southwestern Oklahoma, Texas and Wyoming, according to its May update.
The deals are expected to reduce the company’s net leverage by nearly $3 million, while eliminating about $70 million in interest expense and dividend payments.