Chesapeake Energy Sells Remaining Eagle Ford Assets, Total Proceeds Rises To $3.5B

Chesapeake Energy Corp CHK penned a deal to sell its remaining Eagle Ford assets to SilverBow Resources Inc SBOW for $700 million.

Notably, the company plans to sell around 42,000 net acres and about 540 wells in the condensate-rich portion of its Eagle Ford asset and related properties in Dimmit and Webb counties.  

Including this deal, CHK will garner more than $3.5 billion in total proceeds from Eagle Ford divestiture. 

Related: Chesapeake Divests Eagle Ford Assets To Ineos Energy For $1.4B

The company expects the transaction to close, subject to certain regulatory approvals, in 2023.

Following the transaction completion, CHK will receive $650 million, with the final $50 million installment paid one year from the closing date. 

SilverBow will also pay an additional contingent payment of $25 million to CHK if oil prices average between $75 and $80 per barrel WTI NYMEX or $50 million if it is above $80 during the year. This will increase the total proceeds from this deal to $750 million. 

CHK expects to boost its balance sheet and the share repurchase program with the proceeds.

As of June 30, 2023, the company had cash in hand of around $900 million, and the company bought back around $125 million of shares in Q2 2023. 

Also Read: Chesapeake Energy Set For Organic FCF Generation: Analyst Predicts Strong Hedge Gains

Price Action: CHK shares are trading lower by 0.20% at $84.78 premarket on the last check Monday.