Chesapeake Energy Corp. could spin-off or sell its oil-field services company, the Oklahoma City-based oil and natural gas producer said Monday.
Led by CEO Jerry Winchester, officials said subsidiary Chesapeake Oilfield Services is well-positioned to stand on its own.
Chesapeake Oilfield Services offers drilling, hydraulic fracturing, oilfield rentals rig relocation, and fluid handling and disposal. It brought in revenues of about $2.2 billion in 2013.
Chesapeake filed a registration statement in April 2012 to lay the groundwork for its subsidiary to become a publicly traded company, using the ticker symbol “COS.”
“COS is an outstanding business with a talented management team that we believe will offer Chesapeake and its shareholders enhanced return opportunities as a stand-alone company,” Chesapeake CEO Doug Lawler said in Monday’s release. “It has provided, and will continue to provide, superior service to Chesapeake’s upstream business, and we look forward to maintaining our close and valuable relationship with Jerry and his team as they pursue COS’ ventures outside of Chesapeake. A separation of COS is aligned with our strategies of financial discipline and profitable and efficient growth from captured resources.”
Officials believe the service company can maximize its value to Chesapeake shareholders by optimizing the allocation of capital and corporate resources in a manner that focuses on achieving the strategic priorities of Chesapeake and COS.
The Chesapeake subsidiary also intends to grow its third-party customer base. About a third of its marketable drilling rigs currently are working for other companies.
“We are very excited about this next chapter in COS’ evolution and the tremendous opportunity ahead to grow the company and expand our service offerings for the benefit of Chesapeake, our future shareholders, and each of our outstanding employees,” Winchester said. “We believe that our separation from Chesapeake will position us to further capitalize on our expertise and capture additional third-party work.”