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7 Pages

Chesapeake Energy sells its Barnett Shale assets to Saddle Resources


Chesapeake Energy sells its Barnett Shale assets to Saddle Resources

Report summary

In lieu of proceeds, Saddle Resources will provide a lump sum payment to Williams Partners as settlement for terminating Chesapeake's midstream contracts in the Barnett. Together, Saddle Resources and Chesapeake will pay US$774 million to Williams Partners (US$334 million from Chesapeake, US$420 million from Saddle Resources) to terminate a 20-year gas gathering and shipping contract Chesapeake had entered into in 2012. Plagued by low commodity prices and liquidity concerns, Chesapeake is positioning the company to focus on its core strength - delineating, developing, and growing unconventional plays. The Barnett failed to attract capital within the company's portfolio due to onerous gathering and transportation contracts and declining production. This strategic move improves Chesapeake's medium-term liquidity, financial liabilities, and operational flexibility.

What's included?

This report includes 1 file(s)

  • Chesapeake Energy sells its Barnett Shale assets to Saddle Resources PDF - 1.05 MB 7 Pages, 3 Tables, 4 Figures

Description

The upstream oil and gas industry conducts activities against a backdrop of growing energy and environmental challenges. Political instabilities, international conflicts and government and environmental regulation have all impacted the production process.

This has forced companies to re-examine their corporate strategy, moving away from high-risk exploratory drilling to lower-risk exploration in mature basins as they search for increased returns.

This Upstream Oil and Gas Deal Insight report provides an in-depth analysis of this deal. You will also find information about upstream assets and the strategic rationale behind the deal.

For investors and businesses, this deal insight report provides an understanding of the effect this deal will have on the market, including oil and gas pricing and assumptions. Use it to keep up to date with deal announcements, gain expert insights and analyse potential developments that might affect your strategy.

Wood Mackenzie goes beyond company-reported data and announcements to give you an independent and informed view. Our unique valuation metrics are underpinned by our deep understanding of upstream assets and companies. We help you objectively benchmark and evaluate asset and corporate deals so you can compare deal economics around the world.

  • Executive summary
  • Transaction details
  • Upstream assets
    • Modelling assumptions
  • Strategic rationale
    • Chesapeake
    • Saddle Barnett Resources LLC
    • Williams Partners
  • Oil & gas pricing and assumptions

In this report there are 7 tables or charts, including:

  • Executive summary
  • Transaction details
  • Upstream assets
    • Chesapeake in the Barnett
    • Chesapeake's permit activity and IP (mmcfd) trend in Johnson and Tarrant Counties
    • Upstream assets: Table 1
    • Chesapeake historical gas production in the Barnett by vintage year
    • Upstream assets: Table 2
  • Strategic rationale
    • Chesapeake's progress on reducing fees, debt, and liabilities
  • Oil & gas pricing and assumptions
    • Oil & gas pricing and assumptions: Table 1
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