spwm chesapeakeenergyChesapeake Energy Corporation is selling its interests in the Utica Shale operating area located in Ohio for approximately $2 billion to Encino Acquisition Partners, a private oil and gas company headquartered in Houston. The transaction is expected to close in the fourth quarter of 2018. The purchase price includes a $100-million contingent payment based on future natural gas prices. Chesapeake intends to use the anticipated net proceeds to reduce debt.

Transaction highlights:

• $450-million reduction of projected 2019 gathering, processing and transportation expense, for an expected improvement of approximately $0.50 per barrel of oil equivalent (boe); eliminates all future Utica Shale midstream and downstream commitments of approximately $2.4 billion
• Improves EBITDA by approximately $0.70 per boe in 2019, due to lower cash operating costs and improved oil differentials, assuming flat 2018 commodity prices 
• Expect organic replacement of divested EBITDA within one year, primarily driven by oil-volume growth from the Powder River Basin (PRB)
• 2019 oil production expected to grow approximately 10 percent from 2018, adjusted for asset sales, with additional oil growth anticipated for 2020