CHESAPEAKE is selling non-core Utica acreage for $600 million
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Permalink Reply by porkchop on -
Does anyone have any clues into which Utica acres were sold? thanks in advance.
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Permalink Reply by Ron D. Jockefeller on
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CHK will not disclose who purchased their Utica acreage or where it is, will not put a value per acre on it, and will not disclose how much acreage the company sold. But I have guesses for all four answers. Please take with one large grain of salt on a full stomach. Do not operate heavy machinery afterwards.
My guesses are [not sayin'], Portage and/or Trumbull counties, $4,500 +/- $1,000, and 40,000 acres +/- 25,000.
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Permalink Reply by JR on
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Won't leases have to be updated to show a re-assignment at some point? And, wouldn't the purchaser want to announce their acquisition?
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Permalink Reply by Ron D. Jockefeller on
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The purchaser might want to, but might be restricted by CHK via terms in the sales agreement. The worse the deal is for CHK, the more likely they are to restrict the buyer from issuing a press release. Also, if the buyer is privately held, or if it's a small transaction for a public company, there would be no requirement to announce the transaction.
Yes, leases will have to be updated. Now all we need is a database of all leases in all counties in the Utica/PP and someone to monitor changes for us and then aggregate changes so that we can see what's going on in the play in near real time. I volunteer porkchop for the job. All in favor? [various ayes] All opposed? [crickets] The ayes have it. Congratulations to porkchop.
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Permalink Reply by Frank Nesmith on
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Could be some land in PA, as well. They are drilling Utica in Beaver county.
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Permalink Reply by Ron D. Jockefeller on
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I'm guessing that CHK considers Beaver to be core because it is in the CHKU AMI, which means there is already a drilling carry for it. But 2 other counties in PA (Greene & Washington) along with 6 counties in WV (Hancock, Brooke, Ohio, Marshall, Wetzel & Tyler) are in CHK's Utica lease portfolio and are non-core. They seem to have quite a concentration in the northern peninsula of WV.
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Permalink Reply by Ron D. Jockefeller on
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CHK did not sell the acreage listed on the Meagher site.
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Permalink Reply by 0i7okn54zwbdo on
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Not yet. CHK is in big trouble financially and everyone in the oilpatch knows it. Hard to get a good price when your buyers know that you're desperate.
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Permalink Reply by Ron D. Jockefeller on
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CHK is certainly cash constrained based on its debt levels and cash requirements for development it's required to do. And I would say it's already out of the woods.
The best measure of default risk is interest rates on bonds in the secondary market. On that measure, CHK is better than a single B rating and worse than a double B rating.
The company only needs to raise another $1.4b to $2.4b this year along with $4.25b to $5.0b next year. Presuming CHK sells $1.9b in assets in the 4th Q, which is a good bet, it will finish 2012 with a net leverage ratio of about 3 times, which is no so horrible. 2013 cash flow will be funded with more asset sales.
The Permian assets came in a little light, but it wasn't a fire sale by any means. CHK will be fine. You may now consume the salt.
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Permalink Reply by Ron D. Jockefeller on
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I have a good guess. But I shouldn't say if I'm right and would be doing you a disservice if I'm wrong... So I'll shut up now and go back to watching Gossip Girl.
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Permalink Reply by industry resident on
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i just read article pitt post gazette "pipeline" says royal dutch shell.
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Permalink Reply by bo boboski on
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what is "non-core" mean?
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