It was Chesapeake that discovered the Ohio Utica in 2011. At the time, the late Aubrey McClendon, CEO, famously said, “It would be the greatest thing to hit Ohio since the plow.”
Since then, Ohio’s oil and gas industry has dramatically changed. In first-quarter 2018, the state produced about 6 Bcf/d from over 1,900 horizontal shale wells, according to the Ohio Department of Natural Resources.
A short 7 years later, Chesapeake Energy Corp. is selling its last remaining oil and gas holdings in Ohio’s Utica Shale, a move aimed at whittling down the company’s debt and enabling it to focus increasingly on crude production.
The roughly $2 billion sale to Houston-based Encino Acquisition Partners, announced Thursday, is the latest in a series of deals by Oklahoma City-based Chesapeake to improve its finances.
“This essentially ends the era of asset sales as being the principal instrument for improving our financial balance sheet,” Chesapeake Chief Executive Doug Lawler said in an interview.
Under the deal, expected to close in the fourth quarter, Chesapeake would shed its last 320,000 acres in the Utica. Chesapeake’s 920 wells there produced the equivalent of about 107,000 barrels of oil a day last year, the company said.
Once the country’s second-largest producer of natural gas, Chesapeake has shed billions worth of oil and gas holdings since Mr. Lawler took the helm in 2013. Chesapeake’s net debt as of the end of the first quarter was $9.3 billion. Its debt had swollen to nearly $16 billion in 2012.
The company said it plans to focus on boosting oil production in Wyoming’s Powder River Basin, where it added a fifth drilling rig this month.