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Chesapeake (CHK) to Sell Haynesville Assets for $465 Million
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Chesapeake Energy Corporation (CHK - Free Report) recently inked an agreement to divest a portion of its acreage to an affiliate of Covey Park Energy LLC for about $465 million. We expect these developments to result in stock price appreciation. Year to date, the stock has gained 65.1%, while Zacks categorized sub industry Oil & Gas-U.S. Exploration & Production Market has increased by 44.5%. The asset to be divested include producing properties in its Haynesville Shale operating area in northern Louisiana, which span across a net acreage of 41,500 and comprise 326 operated and non-operated wells that currently produce about 50 million cubic feet (mmcf) of gas per day, net to Chesapeake. The transaction is anticipated to close in the first quarter of 2017.
We note that the company has exceeded its asset divestment target by about $500 million, which brings the total gross proceeds from divestitures to about $2.5 billion. Chesapeake intends to continue its pursuit of strengthening its balance sheet and the Haynesville asset divestment is in sync with its strategy.
Chesapeake is an independent oil and gas company engaged in the acquisition, development, and production of onshore U.S. natural gas resources. Chesapeake is renowned for growth by acquisition. The company has also demonstrated considerable drilling prowess, capitalizing on its extensive inventory of acquired undeveloped acreage to make substantial reserve additions.
Chesapeake owns about 37,100 oil and natural gas wells. The company’s large and diversified resource base comprises onshore U.S. unconventional natural gas and liquids assets. Chesapeake has a leading position in the liquids-rich resource plays of the Eagle Ford Shale in South Texas, the Utica Shale in Ohio and Pennsylvania; the Granite Wash, Cleveland, Tonkawa and Mississippian Lime plays in the Anadarko Basin in northwestern Oklahoma and the Texas Panhandle; and the Niobrara Shale and Upper Cretaceous sands in the Powder River Basin in Wyoming.
Chesapeake’s natural gas resource plays are the Haynesville/Bossier shales in northwestern Louisiana and East Texas, the Marcellus Shale in the northern Appalachian Basin in Pennsylvania and the Barnett Shale in the Fort Worth Basin of north-central Texas. It also owns oil and natural gas marketing and natural gas gathering and compression businesses.
SunCoke Energy posted a positive earnings surprise of 177.78% in the last reported quarter. It reported a positive earnings surprise in three of the four preceding quarters.
Suncor Energy posted a positive earnings surprise of 300.00% in the preceding quarter. It reported an average earnings surprise of 40.55% for the four trailing quarters.
Futurefuel Corp. posted a positive earnings surprise of 20.83% in the last reported quarter. It reported a positive earnings surprise in all of the last four quarters.
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Chesapeake (CHK) to Sell Haynesville Assets for $465 Million
Chesapeake Energy Corporation (CHK - Free Report) recently inked an agreement to divest a portion of its acreage to an affiliate of Covey Park Energy LLC for about $465 million. We expect these developments to result in stock price appreciation. Year to date, the stock has gained 65.1%, while Zacks categorized sub industry Oil & Gas-U.S. Exploration & Production Market has increased by 44.5%.
The asset to be divested include producing properties in its Haynesville Shale operating area in northern Louisiana, which span across a net acreage of 41,500 and comprise 326 operated and non-operated wells that currently produce about 50 million cubic feet (mmcf) of gas per day, net to Chesapeake. The transaction is anticipated to close in the first quarter of 2017.
We note that the company has exceeded its asset divestment target by about $500 million, which brings the total gross proceeds from divestitures to about $2.5 billion. Chesapeake intends to continue its pursuit of strengthening its balance sheet and the Haynesville asset divestment is in sync with its strategy.
Chesapeake is an independent oil and gas company engaged in the acquisition, development, and production of onshore U.S. natural gas resources. Chesapeake is renowned for growth by acquisition. The company has also demonstrated considerable drilling prowess, capitalizing on its extensive inventory of acquired undeveloped acreage to make substantial reserve additions.
Chesapeake owns about 37,100 oil and natural gas wells. The company’s large and diversified resource base comprises onshore U.S. unconventional natural gas and liquids assets. Chesapeake has a leading position in the liquids-rich resource plays of the Eagle Ford Shale in South Texas, the Utica Shale in Ohio and Pennsylvania; the Granite Wash, Cleveland, Tonkawa and Mississippian Lime plays in the Anadarko Basin in northwestern Oklahoma and the Texas Panhandle; and the Niobrara Shale and Upper Cretaceous sands in the Powder River Basin in Wyoming.
Chesapeake’s natural gas resource plays are the Haynesville/Bossier shales in northwestern Louisiana and East Texas, the Marcellus Shale in the northern Appalachian Basin in Pennsylvania and the Barnett Shale in the Fort Worth Basin of north-central Texas. It also owns oil and natural gas marketing and natural gas gathering and compression businesses.
Chesapeake currently has a Zacks Rank #2 (Buy). Other well-ranked players in the same sector include SunCoke Energy Inc. (SXC - Free Report) , Suncor Energy, Inc. (SU - Free Report) and Futurefuel Corp. (FF - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SunCoke Energy posted a positive earnings surprise of 177.78% in the last reported quarter. It reported a positive earnings surprise in three of the four preceding quarters.
Suncor Energy posted a positive earnings surprise of 300.00% in the preceding quarter. It reported an average earnings surprise of 40.55% for the four trailing quarters.
Futurefuel Corp. posted a positive earnings surprise of 20.83% in the last reported quarter. It reported a positive earnings surprise in all of the last four quarters.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>