* To sell assets in Eagle Ford, Haynesville shales
* Deal brings Chesapeake's asset sales to $3.6 bln this year
* Proceeds to help fully fund company's 2013 capex
By Garima Goel
July 3 Chesapeake Energy Corp is selling
assets in the Eagle Ford and Haynesville shales in the United
States to Exco Resources Inc for about $1 billion to
shore up finances battered by years of low gas prices and heavy
The sale is part of the No.2 U.S. gas producer's plan to
sell up to $7 billion of its properties this year.
The sale helps Chesapeake repair its balance sheet and move
into 2014 without relying on a perpetual asset sale program,
said Global Hunter Securities analyst Mike Kelly.
The company's asset sales signed or closed year-to-date,
including Wednesday's deal, stand at about $3.6 billion,
enabling it to fully fund its capital expenditure budget of $7.6
billion for the year, Chesapeake Chief Executive Doug Lawler
Lawler took over from co-founder Aubrey McClendon, under
whom Chesapeake spent heavily on large acreage positions in U.S.
shale basins. McClendon left the company in April after a series
of Reuters investigations triggered civil and criminal probes of
Oil and gas producer Exco said it would buy 55,000 acres in
Eagle Ford in Texas. The assets produced 6,100 barrels of oil
equivalent per day (boe) in May.
Net daily output from the assets in the Haynesville shale -
which spans Texas, Arkansas and Louisiana - was 114 million
cubic feet of natural gas equivalent in the same month.
Sterne Agee & Leach analyst Tim Rezvan said the sale does
not eat into Chesapeake's production stream as the assets
represent about 4 percent of the company's first-quarter output.
Texas-based Exco, which has a market value of $1.62 billion,
focuses on drilling on unconventional properties in the
Haynesville shale, the Permian Basin in West Texas and New
Mexico, and Appalachia's Marcellus shale.
Jefferies & Co Inc is advising Chesapeake on the deal, which
Exco expects to close this month.
Chesapeake shares were up less than 1 percent at $21.11 in
early trading on the New York Stock Exchange. Exco shares were
up 1.5 percent at $7.55.