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07 04, 2013 by The Advocate
Chesapeake Energy Corp., the company that discovered north Louisiana’s Haynesville Shale is selling a big chunk of its assets there in a $1 billion deal with a subsidiary of Exco Resources Inc. in Dallas.
Chesapeake is selling interests in about 9,600 net acres in Desoto and Caddo parishes. That includes nonoperating interests in 170 Exco-operated wells and operating interests in 11 wells run by Chesapeake.
It also is selling about 55,000 net acres in Zavala, Dimmit, La Salle and Frio counties in Texas — part of the northern Eagle Ford Shale. There are 120 producing wells there.
The land provides Exco with producing fields and potentially lucrative drilling sites in the future. Exco said it expects to complete the acquisitions in July.
In May, the Haynesville properties produced the equivalent of 114 million cubic feet of natural gas per day. The Eagle Ford acreage produced the equivalent of about 6,100 barrels of oil per day.
Chesapeake, of Oklahoma City, has been selling assets to reduce its debt. Chesapeake has said it intends to sell $4 billion to $7 billion in assets this year. Sales signed or closed so far total about $3.6 billion.
Chesapeake Chief Executive Officer Doug Lawler said the asset sales and expected operating cash flow will enable Chesapeake to fully fund its 2013 capital expenditure budget.
The company may sell additional assets to cut debt and make the company more liquid, he said.
Chesapeake discovered the Haynesville Shale in 2008. At the time, the formation was thought to be the world’s largest natural gas play and could be the largest in the United States. Chesapeake has estimated the Haynesville could produce 251 trillion cubic feet of natural gas.
Advocate business writer
Ted Griggs contributed
to this report.
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