Chesapeake Energy Corp. has put more of its assets on the sale block as it continues to combat a looming cash crunch.
Chesapeake is selling about 80,000 acres in Grady, Stephens and Garvin counties, an extension of the Cana Woodford Shale, according to a prospectus from industry broker Meagher Energy Advisors. Nearly all of Chesapeake's leases in the area are held by production.
The company has nearly 300 producing wells in the area, with daily production of more than 1,500 barrels of oil and 37 million cubic feet of natural gas.
Chesapeake contends there is significant upside to drilling the play, which counts Continental Resources Inc., Newfield Exploration Co. and Marathon Oil Co. as its most active drillers.
Chesapeake is selling its acreage because it does not have enough money in its drilling budget to “adequately develop the abundant additional opportunities in the area,” according to the listing.
A company spokesman declined further comment on the sale.
Argus Research analyst Phil Weiss said the sale fits with the company's stated plans to narrow its focus by selling unneeded acreage.
The Oklahoma City-based oil and natural gas company has spent much of 2012 looking to raise money to offset its budget problems. Its budget shortfall has been estimated at as much as $22 billion.
Chesapeake has announced deals worth about $4.7 billion, including the sale of its former midstream subsidiary, with additional assets still on the market.
The biggest pieces are Chesapeake's holdings in west Texas' Permian Basin and a joint venture in the oil-rich Mississippian play in northern Oklahoma and southern Kansas.
Houston-based EnerVest will buy a small part of Chesapeake's 1.5 million acres in the Permian, but no further deals have been announced.
Chesapeake also has listed acreage in Ohio, Michigan, Colorado and Wyoming with Meagher.
Chesapeake expects to raise as much as $14 billion this year from asset sales, plus another $4 billion to $5 billion in 2013.
“Our planned asset sales for the year are designed to help us afford to increase our liquids production, tighten the focus on our core assets, while also reducing our long-term debt by 25 percent from year-end 2010,” CEO Aubrey McClendon said Aug. 7 in the company's second-quarter earnings call.