Chesapeake Surges After Abandoning Birthplace of Shale Boom
- Gas driller quitting field to escape $1.9 billion in costs
- Company receiving zero proceeds for handing over assets
Chesapeake Energy Exits Barnett Shale
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Chesapeake Energy Corp. agreed to give away its Barnett Shale holdings to a private-equity backed operator, exiting the birthplace of the shale revolution to escape almost $2 billion in onerous pipeline contracts.
Chesapeake will convey all interests in the Barnett region in North Texas to First Reserve Corp.-backed Saddle Operating LLC, according to a statement Wednesday. Quitting the gas fields will slash Chesapeake’s shipping and processing costs by $715 million between now and the end of 2017 and eliminate a total of $1.9 billion in long-term pipeline agreements. Shares jumped as much as 6.3 percent.