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Chesapeake Energy (NYSE: CHK ) continued its efforts to get its balance sheet in order this week. On Wednesday, the company announced it has signed agreements to sell to an EXCO Resources (NYSE: XCO ) subsidiary:
- 55,000 net acres in Zavala, Dimmit, La Salle and Frio counties, Texas, in the Northern Eagle Ford Shale. These parcels include approximately 120-producing wells, with average net daily production of approximately 6,100 barrels of oil equivalent.
- Operated and non-operated interests in approximately 9,600 net acres in Desoto and Caddo parishes, Louisiana in the Haynesville Shale. These parcels include 11 units currently operated by Chesapeake, and 42 units already operated by EXCO. Average net daily production from these properties is approximately 114 million cubic feet of natural gas equivalent.
Total proceeds to Chesapeake from the sales are approximately $1 billion, with 90% of that due upon closing in Q3 2013, and the balance payable later, subject to "customary post-closing contingencies."
Commenting on the sales, new Chesapeake CEO Doug Lawler noted that: "year-to-date asset sales signed or closed [are] approximately $3.6 billion, which, combined with forecasted net operating cash flow, enables Chesapeake to fully fund its 2013 capital expenditure budget. Additional asset sales contemplated for later this year may reduce long-term debt and further enhance our financial liquidity."