Chesapeake Energy Buys More Drilling Rights In OhioVW Staff
Chesapeake Energy Corporation (NYSE:CHK) has now placed North East Ohio in its cross hairs, with regards with its desire to extend the stretch of its drilling rights. The energy behemoth now has the legal ownership of drilling rights that are traceable to a struggle staged by 14,450 North East Ohio property owners as long as two decades ago.
Property owners in the potent tracts of land in North East Ohio now stand to gain a lot from the move. Chesapeake Energy will start using horizontal drilling on their lands in the extraction of natural gas and oil. Everflow, the company before Chesapeake, was using vertical drilling.
Underscoring, its intentions to bolster growth and extend its portfolio, Chesapeake bought an estimated 28000 acres from Everflow in February. The deal compelled Chesapeake to part with $35 million. Chesapeake now wears Everflow’s former mantle, and as such, will have to pay land owners a 12.5 percent royalty fee that was previously negotiated by Everflow.
Buying and selling
For a better part of this year, Chesapeake Energy Corporation (NYSE:CHK) has made the news several times for its constant buying and selling. We even had the opportunity to cover an insightful story on one land sale.
Towards the end of July, Chesapeake Energy Corporation (NYSE:CHK) decided that it would sell 3,300 acres of its renowned Barnett Shale assets. This decision perhaps, more than ever, pointed out Chesapeake’s desire to make notable advancements with regard to growth. It came at a time when finances were particularly tight. The sale was perhaps geared towards providing funds for expansion and future investments.
The Barnett Shale formation is considered to be the largest natural gas field in North America and is, by and large, synonymous with Chesapeake.
At the time, it also came to light that Chesapeake had intentions of selling Forth worth Office Tower among other notable sales.
Board shakeup, numerous sales and pressure to cut spending- It all makes sense now
Chesapeake Energy Corporation (NYSE:CHK) arguably tops the list of news makers this year, with regards to energy behemoths. If it is not the board shake ups, it is Hawkins’s undying efforts to put a leash on McClendon’s spending pattern.
While Chesapeake’s past activities have sent a lot of mixed signals, a clear picture is starting to develop. The company wants to streamline activities, cut on spending and overhaul its growth prospects. This perhaps explains why it shook up its board some time back and made numerous sales in the past.