OKLAHOMA CITY, Dec. 5 (UPI) -- Once one of the stronger shale gas companies in the United States, Chesapeake Energy said it closed on a $450 million deal to sell some of its shale acreage.
Chesapeake said it sold off 78,000 acres, of which more than half was considered core acreage, in the Haynesville shale area in Louisiana to an undisclosed private company for $450 million. The 250 wells currently in production are yielding about 30 million cubic feet of natural gas per day.
"In addition, Chesapeake is marketing approximately 50,000 net acres located in the northeastern part of its Haynesville shale operating area, which the company also expects to close in the 2017 first quarter," the company said in a statement.
Chesapeake in early February said it retained the services of long-time counsel Kirkland & Ellis to help manage debt and strengthen its balance sheet, though it said it had no plans to pursue bankruptcy. The company it was targeting between $1.3 billion and $1.8 billion in spending for 2016, a 57 percent reduction from last year.
In August, the company left the Barnett shale basin in Texas, which Chesapeake said could result in an increase in operating income by up to $300 million per year through 2019.
By exiting Barnett, the company built a negative cash-flow profile, which could help transform Chesapeake into a top-tier exploration and production company.
Chesapeake CEO Doug Lawler said the company so far this year has signed or closed on divestments worth $2 billion.
"With our long-term target of $2 billion to $3 billion in debt reduction, we will continue to look for opportunities to accelerate value through the sale of additional non-core assets in 2017 and beyond," he said.
Aubrey McClendon, who died in a March car crash, helped establish Chesapeake as a shale oil and natural gas pioneer before he was ousted through an investor rebellion in 2013. Under his tenure, the company became one of the largest natural gas producers in the United States.