Chesapeake says ‘tremendous interest’ in Eagle Ford assets

Chesapeake operations

Chesapeake Energy Corp. said its assets in the Eagle Ford shale have drawn a “tremendous amount of interest” as the U.S. company pursues a sale in order to become a pure-play natural gas producer.

The company has fielded data requests from prospective buyers, and the process could result in all the assets being sold to a single buyer or broken up and sold piecemeal to multiple buyers, CEO Nick Dell’Osso said in an interview in New York Tuesday.

Chesapeake, which was co-founded by Aubrey McClendon and became one of the widely known U.S. shale operators, announced its intention to sell the operations last month. The planned divestment, which comes less than two years after the company exited bankruptcy, would further undo some of the acquisitions made by previous management and mark a retreat from oil.

“When we think about the Eagle Ford today, it’s a great asset that generates a lot of free cash flow,” Dell’Osso said. “So, it’s a process that we can be really patient about how we approach a sale. We think how our shareholders will benefit from the simpler strategy that our company will have.”

Dell’Osso said natural gas has a longer runway as a fuel than crude oil amid the current global energy crisis and the transition to cleaner fuels. He said proceeds from the Eagle Ford assets will be returned to shareholders in the form of dividends and via stock buybacks.

© 2022 Bloomberg L.P.

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