That’s about to change.
Thursday’s announcement that
“We can’t grow the investment as we like, and that makes it a strong candidate for divestiture,” said
“It’s a good thing. You have Chesapeake going through a rationalization of its portfolio. They couldn’t go develop the asset the way they wanted to,” he said.
“Chesapeake divesting its
Chesapeake was one of the early developers of the
Former Chesapeake CEO and co-founder
But prices of natural gas collapsed and have remained low over the past several years. That made it difficult for Chesapeake to service that debt and make the needed investment at the same time. Chesapeake shares sell for about a tenth of what they did a decade ago.
Chesapeake said it plans to use the money from the sale to reduce debt. The sale is expected to close before the end of the year.
The company has about 100 employees in the state with its offices based in
The deal gives Encino Acquisition about 900 wells that produce more than 600 million cubic feet of gas a day. Encino says it plans to operate multiple drilling rigs on the properties to increase production and improve cash flow.
“With a multi-decade inventory of development projects held by 920 producing wells, the
The deal comes on the heels of an announcement on
“You’re going to see increasing activity with two major players now focused exclusively on that area,” Brooks said.
The deal also comes at a time of more pipeline projects in the region that will allow more gas to get to end markets. Also,
“It’s an asset that’s going to be better capitalized,” Lawler said. “It’s an opportunity for future growth of employees and contractors.”
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