Chesapeake Energy to buy back $1.26 bln of preferred shares

July 29 Tue Jul 29, 2014 8:23am EDT

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July 29 (Reuters) - Chesapeake Energy Corp said it would spend $1.26 billion to buy back all of the outstanding preferred shares issued by its CHK Utica unit to simplify its balance sheet and eliminate about $75 million in annual dividend payments.

The natural gas producer also said it would exchange some acreage in Wyoming's Powder River Basin with a private oil and gas producer RKI Exploration & Production LLC to consolidate its holdings in the southern portion of the basin.

Chesapeake will pay RKI $450 million as part of the deal.

CHK Utica holds acreage in Ohio's Utica share field. (Reporting by Swetha Gopinath; Editing by Ted Kerr)