Private Houston firm Encino Acquisition Partners has agreed to buy from Chesapeake Energy Corp. its interests in the Utica shale operating area in Ohio for $2 billion.
The transaction, which is expected to close in the fourth quarter, includes a $100 million contingent payment based on future natural gas prices. Chesapeake intends to use the anticipated net proceeds to reduce debt, the company said.
As part of the transaction, Chesapeake has agreed to sell all of its acreage in Ohio, of which 320,000 net acres are in the commercial window for Utica shale development, 920 operated and non-operated wells, which produced an average of 107,000 boe/d (67% gas, 24% natural gas liquids, and 9% oil) in 2017, on a net basis, and related property and equipment.
Proved oil and gas reserves in the Utica shale as of yearend 2017 were 480 million boe (72% gas, 23% NGLs, and 5% oil).