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

Chesapeake Energy CHK has agreed to divest a portion of its remaining Eagle Ford assets in South Texas to Ineos Energy for $1.4 billion.
The deal covers 172,000 net acres and approximately 2,300 wells in the black oil portion of the gas producer's Eagle Ford assets, primarily in Dimmit, LaSalle, and McMullen counties.
The sale also includes related property, plants, and equipment.
The properties covered under the sale reported average net daily production rates of approximately 36,000 barrels of oil equivalent (boe) (81% liquid) at the end of 2022.
As of 2022, the properties had net proven reserves of approximately 144 million barrels of oil equivalent.
The acquisition will mark Ineos Energy's foray into the U.S. onshore oil and gas market.
Ineos will make a $1.175 billion payment to Chesapeake upon the transaction's closing. An additional $225 million will be paid in installments.
Chesapeake plans to use the proceeds from the transaction to reduce its debt and share buybacks.
Chesapeake's net production in the fourth quarter was approximately 4.05 bcfe daily.
Minor production curtailments negatively impacted fourth-quarter sales in November and weather conditions in late December.
For FY23, the company expects capital expenditures of $1.765 – $1.835 billion.
Price Action: CHK shares are up 1.26% at $79.67 on the last check Wednesday.