Chesapeake Energy selling Barnett Shale acreage

HOUSTON, July 23 Tue Jul 24, 2012 12:52am IST

Related Topics

Stocks

   

HOUSTON, July 23 (Reuters) - Chesapeake Energy Corp, a U.S. oil and gas company facing funding shortfalls this year and next, is selling 3,300 acres (1,335 hectares) in the Barnett Shale in north Texas as part of its effort to limit exposure to low-priced natural gas.

Chesapeake, under pressure from big shareholders to cut costs due to its heavy spending, depressed gas prices and a big debt load, has already laid off 8 percent of its workforce in the Barnett Shale. The company also previously said it would entertain offers for its Fort Worth office tower.

The company's real estate arm, Chesapeake Land Development, aims to raise nearly $100 million from the sales of its Barnett Shale land parcels, according to the unit's website.

A spokeswoman for the company declined to comment.

The sales mark a retreat for the company that helped to pioneer the concept of urban drilling.

When natural gas traded at around $13 per million British thermal units in 2008, Chesapeake drilled wells at a Fort Worth country club, in north Texas neighborhoods and even at the Dallas-Fort Worth International Airport.

This year, natural gas prices fell to their lowest level in a decade, so the company said it was devoting 85 percent of its budget toward drilling for oil.

To help fill a funding gap of around $17 billion for this year and next, Chesapeake has said it would sell up to $14 billion in assets this year. So far, the company has announced $6.6 billion in sales.

Shares of Chesapeake rose 1.3 percent to $17.43 in afternoon New York Stock Exchange trading.

FILED UNDER:

REUTERS EXCLUSIVE

Reuters Showcase

Inflation Targeting

Inflation Targeting

India sets inflation target in monetary policy overhaul.  Full Article 

Rich List

Rich List

Bill Gates tops Forbes rich list, Michael Jordan joins.  Full Article 

Tough Task

Tough Task

India needs sustained GDP growth of 9-10 percent - Jaitley.  Full Article 

Budget 2015

Budget 2015

Budget announcements and reactions from the industry  Full Coverage 

PMI Data

PMI Data

Factory activity growth slows to five-month low in Feb  Full Article 

Coal Auction

Coal Auction

India examines coal mine bids amid reports of discrepancies  Full Article 

Ola Buys Rival

Ola Buys Rival

Ola buys rival TaxiForSure for $200 million  Full Article 

Environment Watch

Environment Watch

Deforestation could shift monsoons, leaving India high and dry.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage