Summary
Expand Energy Corp. (EXE) announced two significant events on December 2, 2011. Firstly, the company received industry recognition, securing the "Industry Leadership Award" at the 13th Annual Platts Global Energy Awards and the "Deal of the Year Award" for its joint ventures in the Eagle Ford Shale and Denver-Julesberg and Powder River basins with a subsidiary of CNOOC Limited. This highlights the company's strategic partnerships and operational achievements in key shale plays. Secondly, and of greater financial significance, the company announced the closing of the sale of $750 million of perpetual preferred shares in its wholly owned subsidiary, CHK Utica, L.L.C. This brings the total proceeds from the sale of CHK Utica preferred shares to $1.25 billion, with EIG Global Energy Partners being a key investor. This transaction is a substantial capital infusion that allows the company to continue developing its Utica Shale assets while retaining common interest and control.
Key Highlights
- 1Chesapeake Energy Corporation (the acquirer/reporting entity) received the Industry Leadership Award at the 13th Annual Platts Global Energy Awards.
- 2The company also won the Deal of the Year Award for its joint ventures in the Eagle Ford Shale and Denver-Julesberg and Powder River basins with a subsidiary of CNOOC Limited.
- 3EXE completed the sale of $750 million of perpetual preferred shares in its subsidiary, CHK Utica, L.L.C.
- 4This second closing brings the total proceeds from CHK Utica preferred share sales to $1.25 billion.
- 5CHK Utica holds approximately 700,000 net leasehold acres in the Utica Shale play primarily in eastern Ohio.
- 6Investors in the CHK Utica preferred shares receive an initial annual distribution of 7% and a 3% overriding royalty interest in wells drilled on the leasehold.
- 7EXE is committed to drilling a minimum of 250 net wells in the CHK Utica area of mutual interest through 2016.