OHIO – The company responsible for the oil and gas boom in Carroll County is selling its Ohio interests in the Utica Shale.
Chesapeake Energy Corporation announced last week it has entered into an agreement to tell its Utica Shale interests in Ohio to Encino Acquisition Partners for approximately $2.0 billion. Encino Acquisition Partners is a private oil and gas company headquartered in Houston, TX.
Chesapeake is selling all of its acreage in Ohio, of which approximately 320,000 acres are in the commercial window for Utica Shale development. It includes 920 operated and non-operated wells, which produced an average of approximately 107,000 barrels of oil equivalent (boe) per day in 2017.
“Today’s announcement makes Chesapeake a stronger and more competitive company. By divesting our position in the Utica and using the proceeds for debt reduction, we will not only significantly improve the health of our balance sheet, but we will also accelerate progress toward our strategic goals of reducing our debt, improving our margins and reaching sustainable free cash flow neutrality,” said Doug Lawler, Chesapeake president and chief executive officer.
Encino Acquisition Partners said in a news release they plan to operate multiple drilling rigs on the properties to increase production and cash flow.
Encino Acquisition Partners was formed in 2017 with a commitment from Canada Pension Plan Investment Board and Encino Energy to acquire and develope high-quality assets with an established base of production and a large, low-cost development inventory across the United States.
“With a multi-decade inventory of development projects held by 920 producing wells, the Utica acquisition provides an excellent start for EAP. We are excited to work with Chesapeake’s employees in the Utica and all other stakeholders in the state of Ohio. With a strong balance sheet and a partner of CPPIB’s stature, EAP is well positioned for continued growth through drilling and acquisitions,” said Hardy Murchison, Encino chief executive officer.
The transaction is subject to certain customary closing conditions, including the receipt of third-part consents, and is expected to close in the fourth quarter of 2018.