Chesapeake to sell Haynesville properties for $450 million

Chesapeake Energy Corp., Oklahoma City, has agreed to sell some of its acreage and producing properties in the Haynesville shale of northern Louisiana for $450 million.

Reuters has identified the buyer as Indigo Minerals LLC, a Houston-based firm created in 2006 that’s backed by Martin Cos., Yorktown Partners LLC, Trilantic Capital Partners LLC, and Indigo management.

The deal, expected to close in first-quarter 2017, involves 78,000 net acres, 40,000 of which Chesapeake considered core acreage. The sale also includes 250 wells currently producing 30 MMcfd of gas net to Chesapeake.

Chesapeake says it’s also marketing 50,000 net acres in the northeastern portion of its Haynesville operating area. The firm expects to close a deal in first-quarter 2017 as well.

Following both planned divestitures, Chesapeake will retain 250,000 net acres in the core of the Haynesville. The firm’s 2017 development program in the shale play will be focused on longer laterals and further enhanced completions, resulting in projected adjusted production growth of 13% from its Haynesville operations in 2017.

Chesapeake says it has now reached $2 billion gross proceeds from divestitures either signed or closed in 2016. That includes its third-quarter sale of the majority of its upstream and midstream assets in the Devonian shale in West Virginia and Kentucky, including 882,000 net acres and 5,600 wells along with related gathering assets and other property, plant, and equipment.

“With our long-term target of $2-3 billion in debt reduction, we will continue to look for opportunities to accelerate value through the sale of additional noncore assets in 2017 and beyond,” said Doug Lawler, Chesapeake chief executive officer.

Indigo Minerals, meanwhile, has more than 600,000 acres in 16 states with production from more than 500 wells. The working interest operated properties are in East Texas, and northern and central Louisiana.

The firm operates more than 870 wells and is a working interest owner in another 340 wells. It runs an active 2-4 rig development program, drilling Cotton Valley Sand and Haynesville shale horizontals. Over the last 5 years Indigo has drilled more than 125 horizontal wells.

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