Chesapeake considers sale or spinoff of oilfield service unit
BY YURIY HUMBER
OKLAHOMA City, Oklahoma (Bloomberg) -- Chesapeake Energy Corp., the second largest U.S. natural gas producer, said it’s looking at options including the sale or a spinoff to existing shareholders of the company’s oilfield services unit.
The unit, Chesapeake Oilfield Operating LLC, had sales of about $2.2 billion last year and is able to work as a stand-alone firm, the Oklahoma City-based energy producer said in a statement. The unit earns about 35 percent of its revenue from contracts with companies other than its parent.
The oilfield services business “will offer Chesapeake and its shareholders enhanced return opportunities as a stand-alone company,” Doug Lawler, Chesapeake’s CEO, said in the statement. “A separation of COS is aligned with our strategies of financial discipline and profitable and efficient growth from captured resources.”
Chesapeake Energy is cutting capital spending by about 20 percent this year and pursuing further asset sales as it faces a funding gap of about $1 billion in 2014, the company said earlier this month. The oilfield services unit owns nine hydraulic fracturing fleets, rents equipment for oilfields and operates 260 rig relocation trucks, as well as cranes and forklifts, according to Chesapeake Energy.