Chesapeake Energy (NASDAQ:CHK) to acquire Chief E&D Holdings US$2 billion in cash and approximately 9.44 million shares. The deal includes associated interests held by Tug Hill.
Chesapeake also announced the sale of its Powder River Basin assets in Wyoming to Continental Resources (NYSE:CLR) for approximately US$450 million in cash.
Both deals are subject to regulatory approvals and are expected to close by the end of the first quarter of 2022.
The Chief E&D purchase marks the second major acquisition since their emergence from bankruptcy in February, 2021. Chesapeake completed the purchase of Vine Energy in November, 2021 for US$2.2 billion in cash and shares.
The Powder River Basin sale is also Continental’s second recent acquisition, having purchased Permian Basin assets from Pioneer Natural Resources in 2021 for US$3.25 billion.
Chesapeake is focused on natural gas production, and has operations in Louisiana, Pennsylvania, Texas, and Wyoming. The acquisition of Chief E&D adds to its Marcellus position in Northeast Pennsylvania, immediately adding production and cash flow. Dividends are expected to increase by approximately 14%.
Chesapeake news release: http://investors.chk.com/2022-01-25-CHESAPEAKE-ENERGY-CORPORATION-SIMPLIFIES-PORTFOLIO-THROUGH-ACQUISITION-OF-CHIEF-E-D-HOLDINGS,-LP-AND-AFFILIATES-OF-TUG-HILL,-INC-AND-SALE-OF-POWDER-RIVER-BASIN-ASSETS