EXCO to buy Eagle Ford, Haynesville assets from Chesapeake for $1 billion

Posted Wednesday, Jul. 03, 2013  comments  Print Reprints
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Dallas-based EXCO Resources is spending about $1 billion to acquire assets from Chesapeake Energy in South Texas and Louisiana.

The land provides EXCO with producing fields and potentially lucrative future drilling sites.

For Chesapeake, it’s another step toward improving its cash position after a plunge in natural gas prices rattled the company. The Oklahoma City-based company, which helped pioneer some of the techniques that tilted the energy landscape for the U.S., has been dumping assets to raise cash and diversify.

After building a hefty debt burden from rapid growth, Chesapeake has said it intends to sell $4 billion to $7 billion in assets this year.

“Today’s announcement brings our year-to-date asset sales signed or closed to approximately $3.6 billion, which, combined with forecasted net operating cash flow, enables Chesapeake to fully fund its 2013 capital expenditure budget,” Chesapeake CEO Doug Lawler said. “Additional asset sales contemplated for later this year may reduce long-term debt and further enhance our financial liquidity.”

Chesapeake Energy is selling about 55,000 net acres in Zavala, Dimmit, La Salle and Frio counties in Texas, part of the Eagle Ford Shale. The area has 120 producing wells.

It’s also selling interests in about 9,600 net acres in DeSoto and Caddo parishes in Louisiana, part of the Haynesville Shale. That includes nonoperating interests in 170 EXCO-operated wells and operating interests in 11 wells run by Chesapeake.

Chesapeake said it will receive about 90 percent of the proceeds from the sale at closing.

Douglas Miller, EXCO’s chairman and CEO, said the acquisition “establishes our position in the high-value oil core area of the Eagle Ford Shale” and adds to its leading core position in the Haynesville.

EXCO Resources said it expects to complete the acquisitions in July.

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