Chesapeake (CHK) To Divest Part Of Haynesville Properties

Chesapeake Energy Corporation (NYSE:CHK) recently inked a divestment agreement for part of its acreages in Haynesville Shale area. The transaction amount is expected to be roughly $450 million. Per Reuters, natural gas producer Indigo Minerals LLC is the buyer of the properties. Following the deal, Chesapeake gained more than 3% in the NYSE.

Per the accord, Chesapeake is anticipated to sell 78,000 net acres from the region, of which approximately 40,000 net acres is considered to be core acreage. The sale – likely to be completed by the first quarter of 2017 – also comprises 250 wells with production capacity of 30 million cubic feet of gas every day.

Including this transaction, Chesapeake has garnered gross proceeds of roughly $2 billion from the deals that are either completed or signed during 2016. The company also announced that it is seeking potential buyers for an additional 50,000 acres in its Haynesville Shale region within the first quarter of the next year.

Investors should know that these initiatives reflect the company’s aim to lower its $2–$3 billion debt load by selling non-core properties. In fact, Chesapeake will continue to look for further opportunities to vend more assets next year in a bid to improve liquidity and pay off debt.

Those developments will definitely help the company to carry on the ongoing positive price momentum. Chesapeake’s recent price chart showed that year to date it gained more than 66% compared with 47% for the Zacks categorized Oil & Gas-U.S Exploration and Production industry.

Oklahoma-based Chesapeake is an independent oil and gas company engaged in the acquisition, development, and production of onshore U.S. natural gas resources. The company currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy sector are Newfield Exploration Company (NYSE:NFX) , EQT Midstream Partners, LP (NYSE:EQM) and Helix Energy Solutions Group, Inc. (NYSE:HLX) .

Newfield is likely to witness year-over-year earnings growth of more than 3% in the current year. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

EQT Midstream is projected to witness year-over-year earnings growth of more than 14% in the current year. It has a Zacks Rank #2 (Buy).

Helix Energy posted an average positive earnings surprise of 56.42% in the last four quarters. The company has a Zacks Rank #2.

Zacks' Top Investment Ideas for Long-Term Profit

How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>