For the second time in as many weeks, Oklahoma City-based Chesapeake Energy found a buyer for thousands of leasehold acres, and analysts are reacting positively to the transaction.
Chesapeake already sold about 40,000 profitable acres in northern Louisiana, so it wasn’t a surprise when the company announced this week it found a buyer for another swath of land in the Haynesville Shale.
The Journal Record’s Sarah Terry-Cobo reports the natural gas driller got a good price on both deals.
The transaction includes about 326 wells producing 50 million cubic feet per day of natural gas and about 41,500 acres of leases. Wunderlich Securities Inc. managing director Jason Wangler said the price per acre was about $7,500. That’s better than the previous Haynesville sale announced Dec. 5, in which the company got about $4,000 per acre.
“I’m positive on the timing, because I had not expected it to be done until next year,” Wangler said.
The latest deal from the driller in about two weeks helps executives exceed their stated goal of selling $2 billion in producing wells and land leases. Chesapeake CEO Doug Lawler wrote in a prepared statement the company received about $2.5 billion through its divestitures in 2016.
Fadel Gheit, a Senior Energy Strategist and Managing Director with Oppenheimer & Co. Inc., said the deal with help Lawler pay down debt, which is still high.
“He’s done a very good job, considering the collapse of commodity prices,” Gheit said. “He was been unwavering in his focus to reduce debt and improve operational efficiency.”
Lawler eliminated about $10 billion in liabilities since he joined the company in June 2013. Some of that reduction was ending or renegotiating contracts that required payments even if oil and gas were not shipped through pipelines. Wangler said even though those liabilities don’t show up on the balance sheet, those contracts are still a form of debt.
“Now they can actually attack the debt itself, and that is a positive,” Wangler said.
A former Chesapeake executive has been named the C-E-O of Tapstone Energy.
Steve Dixon will replace Tapstone founder Tom Ward effective January 1. Dixon spent 22 years at Chesapeake, rising to the rank of chief operating officer.
The Oklahoman's Adam Wilmoth reports Dixon served as the company's interim CEO after Aubrey McClendon was ousted in 2013, but was terminated later that year when Lawler took over:
Dixon and Ward worked together at Chesapeake, which Ward co-founded with McClendon in 1989. Ward served as Chesapeake's chief operating officer until he left the company in 2006.
Ward then bought a stake in Amarillo-based Riata Energy for $500 million before moving the company to Oklahoma City and renaming it SandRidge Energy Corp. Ward was ousted from SandRidge in a June 2013 shareholder revolt. He founded Tapstone four months later.
The Bricktown-based Tapstone has about 150 employees, and has energy interests in central and northwest Oklahoma. The company says Ward will keep a significant ownership stake as he starts a new Oklahoma City-based venture.
The Securities and Exchange Commission says SandRidge has settled charges it retaliated against a whistleblower and used illegal separation agreements.
The SEC said Tuesday SandRidge agreed to pay a penalty of $1.4 million dollars.
The company's spokesman David Kimmel says SandRidge cooperated fully with the SEC's investigation. Kimmel also says that under the company's bankruptcy reorganization plan, the SEC fine will be satisfied by a payment of about $100,000.
The regulatory agency says SandRidge allegedly fired an internal whistleblower who raised concerns about the process it used to calculate its publicly reported oil-and-gas reserves. The SEC says SandRidge also allegedly used separation agreements that prohibited outgoing employees from participating in government investigations or disclosing potentially harmful company information.
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