Chesapeake Energy Corp. on March 9 completed its previously announced multibillion-dollar acquisition of Chief E&D Holdings, LP and associated nonoperated interests held by affiliates of Tug Hill Inc.
“The Chief transaction deepens our premium inventory, allowing us to allocate additional capital toward our world class Marcellus Shale position and accelerate returns for our shareholders,” Nick Dell’Osso, Chesapeake’s president and CEO, commented in a company release.
“With the integration of these assets into our existing portfolio,” Dell’Osso continued, “we look forward to generating greater free cash flow, growing our dividend programs, and improving our GHG emissions metrics as we continue to responsibly deliver reliable, affordable, lower carbon energy in 2022 and beyond.”
Chesapeake Energy Completes Acquisition of Chief, Tug Hill Affiliates
Chesapeake Energy Marcellus Shale Position Investor Presentation Acreage Map (Source: Chesapeake Energy Corp.)
On Jan. 25, Chesapeake Energy flipped the script on its story when, in a single move, the company announced the purchase of private Marcellus operator Chief Oil & Gas alongside an exit from the Powder River Basin, ultimately refocusing its portfolio mainly on shale gas after years spent trying to diversify into oil.
According to the transaction agreement, Chesapeake acquired privately held Chief Oil & Gas and associated nonoperated interests held by affiliates of Tug Hill for $2 billion in cash and approximately 9.44 million common shares. Analysts with Tudor, Pickering, Holt & Co. (TPH) estimate the cash-and-stock deal structure implies a roughly $2.6 billion total price tag.
Additionally, Chesapeake also announced on Jan. 25 an agreement to sell its Powder River Basin assets in Wyoming to Continental Resources Inc. for $450 million in cash. The Powder River transaction is expected to close by the end of first-quarter 2022, at which time Chesapeake’s newly simplified portfolio will include refocused positions in the Marcellus, Haynesville and Eagle Ford shale plays.
Source: Hartenergy
