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Chesapeake (CHK) Selects Evercore to Aid Eagle Ford Asset Sale

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Chesapeake Energy Corporation plans to exit oil-rich Eagle Ford shale assets in Texas and has selected Evercore to support this transaction in an auction, per Bloomberg. After Labor Day, the auction will probably take place, the source revealed.

In the prolific resource, Chesapeake Energy has a strong foothold and has leases across roughly 610,000 net acres. In the second quarter of this year, the upstream energy player produced 88,000 barrels of oil equivalent per day (BoE/D) from the Eagle Ford.

According to the source, the conclusion of the transaction would generate billions of dollars. The proceeds will possibly aid Chesapeake Energy in returning more capital to shareholders.

Along with the June quarter results, CHK stated that future growth prospects lie with Haynesville assets, where the company will increase its capital allocations while lowering activities in the Eagle Ford. Hence, CHK is considering Eagle Ford as non-core. Chesapeake Energy believes that with the allocation of resources comprising human and capital toward gas-rich assets in Marcellus and Haynesville, it would become a better company in the coming days.

Currently, Chesapeake Energy carries a Zacks Rank #3 (Hold). Better-ranked players in the energy space include Exxon Mobil Corporation (XOM - Free Report) , BP plc (BP - Free Report) and Eni SpA (E - Free Report) . Eni carries a Zacks Rank #2 (Buy), ExxonMobil and BP sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ExxonMobil’s upstream operation is benefiting from the high oil price. XOM reported strong earnings thanks to higher realized commodity prices and solid refinery utilization, offset partially by increased ethane feed costs in North America. In 2022, ExxonMobil is likely to see earnings growth of 135.7%.

High oil prices are aiding BP’s upstream operations. Its sizable refining and marketing operations will protect it if the crude pricing scenario turns unfavorable again. For 2022, it is likely to witness earnings growth of 116.2%. Over the past few quarters, BP has successfully been reducing long-term debt.

Eni is expecting the discovery of 700 million barrels of oil equivalent (BoE) of new exploration resources this year, suggesting an improvement from the prior guidance of 600 million BoE. For 2022, Eni is likely to witness earnings growth of 165.9%.


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