Chesapeake plans to sell wells in Wyoming, Colorado

HOUSTON/NEW YORK (Reuters) - Chesapeake Energy Corp has put a half-million acres in Wyoming and Colorado up for sale, as the second-largest U.S. natural gas producer scrambles to raise cash to close a $9 billion to $10 billion funding shortfall.

Chesapeake, which earlier this month arranged a pricey $4 billion loan from its investment bankers to tide it over, has said it will sell as much as $11.5 billion in assets this year.

The deal for the acreage in the DJ Basin also includes oil and gas production from 29 wells that the company operates and Chesapeake's interest in 24 non-operated wells, the company said in a statement.

Some of the assets are located in the Niobrara shale, an area the company's chief executive, Aubrey McClendon, characterized as disappointing in February.

Investors have been agitating for change at the company, which is under financial stress and dealing with a governance crisis. Earlier this month, Chesapeake's largest shareholder, Southeastern Asset Management, urged the company to sell more assets or consider a sale of the entire company.

Analysts and investors have called for change at the company after Reuters reported that McClendon had taken out more than $1 billion in loans using his interest in thousands of company wells as collateral.

McClendon's personal lender, EIG Global Energy Partners, is also a big source a funding for Chesapeake, a situation that may cause conflicts of interest, according to academics and analysts.

In a statement on Thursday, Chesapeake described the DJ Basin acreage as "highly prospective" but no longer essential to its core holdings. Similar sales will take place over the next year or so, it said.

Mark Hanson, an oil and gas analyst at Morningstar, said it makes sense for the company to sell acreage that was not productive, that but it also underscores Chesapeake's need for cash.

Chesapeake, for years one the most active gas drillers, sold off a third of its 800,000 acres to China's CNOOC Ltd for nearly $1.3 billion in 2011.

The joint venture with CNOOC is not affected by the planned DJ Basin asset sale, Chesapeake said.

The company's 2012 funding shortfall comes as natural gas prices are the lowest in a decade.

Chesapeake has already announced that it is looking to sell its 1.5 million acres of lease holdings in the oil-rich Permian basin as well as find a joint venture partner in another liquids-rich region, the Mississippi Lime basin, in order to raise cash.

Chesapeake shares closed up 3.2 percent at $15.58 on the New York Stock Exchange on Thursday.

(Editing by Lisa Von Ahn, Bob Burgdorfer and Matthew Lewis)

  • 2015 Dodge Charger goes under the knife 1 hour 10 minutes ago
    2015 Dodge Charger goes under the knife

    Over the past decade, Chrysler's rear-wheel-drive sedans have managed to survive a bankruptcy and three different corporate overlords. Thanks to the original stoutness of the Mercedes-assisted chassis, and the periodic updates that keep them from seeming like 21st-century versions of the Ford Crown Victoria, the Chrysler 300 and Dodge Charger combo still draw in fans. Today, Dodge revealed yet another redesign for the 2015 Charger — and for an old car, it's quite the change.

  • Thursday #sgroundup: Singaporeans slam NEA's $120 licence requirement for tissue sellers 1 hour 10 minutes ago
    Thursday #sgroundup: Singaporeans slam NEA's $120 licence requirement for tissue sellers

    Here are the top trending stories of today in case you missed them:

  • 2015 Nissan Murano aims for the style-forward crowd 15 hours ago
    2015 Nissan Murano aims for the style-forward crowd

    Nissan says its 2015 Murano crossover, only the second major revamp of the car since it debuted in 2003, draws its design cues from the “age of future space flight.” That’s probably taking it a little far, but the new Murano, based off the 2013 Resonance concept vehicle, is an exceptionally lovely machine, all fluid, curved metal on the outside, and flowing, soft-touch materials on the inside. Certain kinds of comfort and charms that were unheard-of outside of premium vehicles five years ago have definitely trickled down, and reached a kind of design apotheosis with this car.

  • ‘Huge’ Hindu, Buddhist statues against Islam, ex-judge says
    ‘Huge’ Hindu, Buddhist statues against Islam, ex-judge says

    KUALA LUMPUR, April 16 — The “huge” statues at a Hindu temple in Batu Caves and Buddhist temple in Penang are an affront to Islam as the religion forbids idolatry, a retired Court of Appeals judge...

  • Over 280 missing after South Korean ferry capsizes
    Over 280 missing after South Korean ferry capsizes

    By Narae Kim JINDO South Korea (Reuters) - More than 280 people, many of them students from the same high school, were missing after a ferry capsized off South Korea on Wednesday, in what could be the country's biggest maritime disaster in over 20 years. It was not immediately clear why the Sewol ferry listed heavily on to its side and capsized in apparently calm conditions off South Korea's southwest coast, but some survivors spoke of a loud noise prior to the disaster.

  • StarHub 4G users to be charged from June as promo ends
    StarHub 4G users to be charged from June as promo ends

    Are you on the 4G or LTE mobile data network under StarHub? If so, you’ll have to start paying for the service.