Press release
CHESAPEAKE ENERGY CORPORATION SIMPLIFIES PORTFOLIO THROUGH ACQUISITION OF CHIEF E&D HOLDINGS, LP AND AFFILIATES OF TUG HILL, INC. AND SALE OF POWDER RIVER BASIN ASSETS
Refocuses portfolio on highest-return assets, strengthens Marcellus position and increases free cash flow and dividend payout OKLAHOMA CITY, Jan. 25, 2022
About this update from Expand Energy Corporation
[{"type":"text","content":"Refocuses portfolio on highest-return assets, strengthens Marcellus position and increases free cash flow and dividend payout\n\n\nOKLAHOMA CITY, Jan. 25, 2022 /PRNewswire/ -- Chesapeake Energy Corporation (NASDAQ:CHK) (\"Chesapeake\") today announced significant transactions designed to strengthen its asset portfolio, deliver higher free cash flow, and increase its projected annual dividend payments.\n\n \n \n \n \n \n \n\n \nThe company signed definitive agreements to acquire Chief E&D Holdings, LP (\"Chief\") and associated non-operated interests held by affiliates of Tug Hill, Inc. (\"Tug Hill\"), for $2.0 billion in cash and approximately 9.44 million common shares. Chief and Tug Hill hold high quality producing assets and an inventory of premium drilling locations(1) in the prolific Marcellus Shale in Northeast Pennsylvania. The cash portion of the transaction will be financed with cash on hand and the use of the company's revolving credit facility. The transaction, which is subject to customary closing conditions, including certain regulatory approvals, is expected to close by the end of the first quarter of 2022. \nChesapeake also signed an agreement to sell its Powder River Basin assets in Wyoming to Continental Resources, Inc. (NYSE:CLR) for approximately $450 million in cash. The transaction, which is subject to certain customary closing conditions, is expected to close in the first quarter of 2022. At closing, net proceeds from the sale will go toward the purchase price of the Chief acquisition.\nHighlights: \nOptimizes Chesapeake's portfolio, focusing people and capital allocation on the company's core assets Immediately accretive to production, operating cash flow per share, free cash flow(2) per share, free cash flow yield(2) and GHG emissions profile Increases cumulative five-year free cash flow outlook to more than $9 billion at today's commodity strip prices; portfolio to generate approximately 75% of 2022 projected cash flow from natural gas assets and 25% from oil assets, post closing of transactions Preserves Chesapeake's balance sheet strength, with an estimated 2022 pro forma net debt-to-EBITDAX(2) ratio of approximately 0.8x using current commodity strip prices Expected to increase annual base dividend by approximately 14% from $1.75 to $2.00 per share beginning in the second quarter of 2022, reflecting t...