Dec. 5 (Bloomberg) -- Chesapeake Energy Corp., which agreed last month to sell part of its Utica Shale holdings, sold to a group of private investors $750 million worth of preferred shares in a subsidiary created to help fund development of the oil and natural-gas field.
The shares in CHK Utica LLC were sold to Magnetar Capital, Blackstone Group’s GSO Capital Partners LP, and an investment vehicle managed by EIG Global Energy Partners LP that consists of certain employees and limited partners, according to a statement today. Chesapeake said on Nov. 3 it had sold $500 million in preferred shares in the subsidiary, which holds about 700,000 acres in the shale formation, to private-equity firm EIG Global Energy.
Chesapeake, based in Oklahoma City, owns drilling rights for a total of about 1.5 million net acres in the Utica, which stretches from Ohio to Canada. The formation may hold as much as 5.5 billion barrels of oil and 15.7 trillion cubic feet of gas in Ohio, according to the state’s Department of Natural Resources.
Chesapeake also announced on Nov. 3 it signed a letter of intent to sell 25 percent of 650,000 acres in the field it co- owns with Houston-based Enervest Ltd. The buyer, an unnamed international oil company, will pay Chesapeake $640 million in cash and about $1.5 billion in future drilling costs.
Chief Executive Officer Aubrey McClendon said on Nov. 30 he expects that deal to close and the buyer’s name to be disclosed by the end of the year.
--Editors: Tina Davis, Alex Devine
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