Natural gas provider Chesapeake Energy Corporation (CHK - Free Report) is looking to sell an acreage exceeding 94,000 at the Utica/Point Pleasant shale acreage in Portage and Stark counties, Ohio, as per the real-estate filings.
The latest acreage put up for sale, rests on a stretch of rock spread between Ohio and Pennsylvania and is about 10% of the one million net acrerage Chesapeake holds in the Utica shale formation. This stretch is expected to become a key oil and natural gas hub.
The acreage comprises three wells, of which two are operated by Chesapeake while the company holds a financial interest in the third. The wells are located in the 40 to 50 gravity oil window. The Point Pleasant play has a thickness of around 125 feet to 150 feet and a porosity of 3% to 6%.
The company has listed its properties with broker Meaghar Energy Advisors, which had already listed around 330,000 net acres of the area last year. Most of Chesapeake’s activities are concentrated in Carroll, Columbiana and Harrison counties. The company wants to focus on counties in which it has a more concentrated acreage.
Chesapeake, the second-largest U.S. natural-gas producer after ExxonMobil Corporation (XOM - Free Report) , intends to divest assets valued at about $4 billion to $7 billion in 2013. This year, the company has already raised $1.5 billion through asset sale. Through these efforts the company aims to restrict its budget and reduce drilling costs. The Oklahoma-based company also seeks to refine its balance sheet after years of acquisitions and capital-intensive projects.
Chesapeake currently retains a Zacks Rank #2 (short-term Buy rating). There are other stocks in the oil and gas industry, like Range Resources Corporation (RRC - Free Report) and Stone Energy Corporation (SGY - Free Report) , which appear more promising and carry a Zacks Rank #1 (Strong Buy).