Chesapeake to sell acres in Western Oklahoma oil play

10/11/2012

Chesapeake to sell acres in Western Oklahoma oil play

BY BEN LEFEBVRE

OKLAHOMA CITY -- Chesapeake Energy Corp. is selling a significant swath of land in an oil-and-gas play that the company had recently called a "significant boost" to its long-term strategy.

Chesapeake is selling more than 28,000 net acres in the Granite Wash and Hogshooter Wash areas in western Oklahoma, according to a posting Thursday on the oil and gas real estate service Meagher Energy Advisors. The sale would leave Chesapeake about 2,000 net acres in the area.

Chesapeake, the second-largest natural gas producer in the U.S., has been selling assets to plug a cash shortfall as it moves its operations toward more-profitable oil production and attempts to cut back on its leasing and drilling budget. The Oklahoma City-based company has pledged to cut debt to $9.5 billion by the end 2012, down from $14 billion in the second quarter.

Chesapeake said the area for sale contains 117 wells that provided $3.2 million a month in net operating cash flow.

Chesapeake announced a "significant new discovery" of oil in the Hogshooter play in June, saying it had drilled an exploratory well that produced 7,350 bopd. Chesapeake Chief Executive Aubrey McClendon had called it "one of the best oil wells drilled onshore in the Lower 48 in the past several decades."

The real estate filing did not indicate whether the particular well would be included in the sale. A Chesapeake spokesman was not immediately available.

Dow Jones Newswires

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