“We are particularly pleased with the market's response to the multiple small asset packages that we have offered,” he said. “Many of these assets may not be individually noteworthy to investors, but in aggregate, the combined value that we anticipate collecting this year will likely be very meaningful and lead to further progress in improving our balance sheet.”
Highlighting the small-sales program, Houston-based Gastar Exploration Ltd. said Monday it is buying oil and natural gas assets, including 176 producing wells, in Kingfisher and Canadian counties for $75.2 million.
Gastar also agreed to buy back 6.8 million of its own shares from Chesapeake for $9.8 million, or $1.44 a share. As part of the deal, Gastar and Chesapeake agreed to settle all current litigation between the two companies.
“This acquisition of undeveloped acreage and producing properties in our Mid-Continent area will provide us a tremendous opportunity to secure a much larger position in what we believe has the potential to be a highly prolific new oil play,” said J. Russell Porter, Gastar's president and CEO.
To help meet Chesapeake's 2013 budget, Dixon said the company has added hedges on some of its 2013 and 2014 natural gas production, locking in prices “well above $4, a level the market has not seen for quite some time.”
Company buys back senior notes
Chesapeake Energy Corp. on Monday said it has bought back more than $592 million in senior notes and issued $2.3 billion in new notes even as former CEO Aubrey McClendon was set to give testimony in an ongoing dispute over another note repurchase effort.
Chesapeake said it bought back more than $216 million, or 46 percent, of its 7.625 percent senior notes due in 2013 and more than $376 million, or 79 percent, of its 6.875 percent senior notes due in 2018. The tender offers are scheduled to continue until April 12.
Chesapeake also said Monday it has completed its previously announced new issuance of $2.3 billion. The new offering is comprised of three series of notes: $500 million in 3.25 percent senior notes due in 2016; $700 million in 5.375 percent senior notes due in 2021; and $1.1 billion in 5.75 percent senior notes due in 2023.
Chesapeake also wants to buy back $1.3 billion in 6.775 percent senior notes due in 2019, although that issue has been more difficult.
Bondholder Bank of New York Mellon sued earlier this year, saying Chesapeake must pay an additional $400 million in interest because it waited too long to announce its buyback plan.
McClendon will testify in the case, according to court filings released Monday.