* Sees competition from Exxon, Hess in Utica
* Still expects Utica venture by end-year
* Shares up 4 pct
By Anna Driver
HOUSTON, Nov 30 Chesapeake Energy Corp
is still buying acreage in Ohio's Utica shale formation, Chief
Executive Officer Aubrey McClendon said on Wednesday, but is
facing increased competition there from companies such as Exxon
Mobil Corp and Hess Corp .
Chesapeake is the most aggressive buyer of land in the new
U.S. shale formations, which are believed to hold massive
reserves of natural gas and oil.
"Right now there's still acreage to be acquired," he told
reporters at the Jefferies & Co energy conference.
Chesapeake's huge appetite for new property has left the
company too debt-laden to pay for drilling, and has forced it
attract joint venture partners to help pay development costs.
The company is expected to make an announcement later on
Wednesday about a $750 million preferred share sale that it
first announced on Nov. 3 and said it would close by Nov. 30.
That sale of preferred shares would be for its newly formed
entity, CHK Utica LLC, which owns about 700,000 acres of
leasehold in the Utica shale.
McClendon said the company is still on track to close a
joint venture deal for some of its Utica acreage by the end of
the year. Chesapeake has so far only said the pact was made
with a large international company, which some analysts believe
might be France's Total SA .
Chesapeake, which has said it will raise up to $13 billion
next year to help close a funding gap some analysts estimate at
more than $7 billion, will not consider asset sales, McClendon
Asset sales currently do not make sense for Chesapeake as
long as natural gas prices remain depressed, McClendon said,
adding that the company will continue to look at volumetric
production payments and other ways of monetizing cash flow from
Chesapeake will end its major acreage purchases next year,
Shares in Chesapeake were up over 4 percent at $24.74 on
the New York Stock Exchange.