Chesapeake Energy Corporation announced that it has executed an agreement to sell a portion of its remaining Eagle Ford asset to INEOS Energy for $1.4 billion.

"Today marks another important step on our path to exiting the Eagle Ford as we focus our capital on the premium rock, returns and runway of our Marcellus and Haynesville positions," said Chesapeake President and Chief Executive Officer Nick Dell'Osso. "We are pleased to have secured an aggregate of $2.825 billion to date and remain actively engaged with other parties regarding the rest of our Eagle Ford position."

Chesapeake has agreed to sell approximately 172,000 net acres and approximately 2,300 wells in the black oil portion of its Eagle Ford asset primarily in Dimmit, LaSalle and McMullen counties, along with related property, plant and equipment. Average net daily production from these properties was approximately 36,000 barrels of oil equivalent (boe) (81% liquid) during the fourth quarter of 2022. As of December 31, 2022, net proved reserves associated with these properties were approximately 144 million barrels of oil equivalent (mmboe).

Chesapeake expects the transaction will close in the second quarter of 2023, with an effective transaction date of October 1, 2022. The company will receive $1.175 billion upon closing, subject to customary adjustments, with the additional $225 million paid in annual installments of $56.25 million. Chesapeake anticipates the proceeds will be applied to repay borrowings under its revolving credit facility and be available for its share repurchase program.

RBC Capital Markets, Citi, and Evercore are serving as financial advisors, Haynes and Boone, LLP is serving as legal advisor, and DrivePath Advisors is serving as communications advisor to Chesapeake.

About Chesapeake Energy

Headquartered in Oklahoma City, Chesapeake Energy Corporation (NASDAQ:CHK) is powered by dedicated and innovative employees who are focused on discovering and responsibly developing our leading positions in top U.S. oil and gas plays. With a goal to achieve net zero GHG emissions (Scope 1 and 2) by 2035, Chesapeake is committed to safely answering the call for affordable, reliable, lower carbon energy.

About INEOS Energy

INEOS Energy is the energy division of INEOS, a multinational chemical company that operates in a variety of industries including petrochemicals, specialty chemicals, and oil and gas. INEOS Energy was established in 2020 to oversee the company's growing portfolio of energy-related businesses, which includes exploration and production, as well as trading of oil and gas.

The company's exploration and production activities focus on onshore and offshore oil and gas assets in the North Sea, in the UK and Denmark. In recent years, INEOS Energy has made investments in low-carbon technologies, including Carbon Capture and Storage, and hydrogen.

INEOS Energy leads a consortium that will test the world’s first cross border offshore carbon capture and storage project, later this year in the North Sea. The Denmark sector project has potential sequestration volumes of 1.5 million tonnes of CO2 per year by 2025, increasing to a potential 8 million tonnes of CO2 per year by 2030.

INEOS is also part of a consortium of eleven companies that support the large-scale deployment of carbon capture and storage (CCS) technology in Houston, Texas. The potential storage capacity in the Houston area alone could lead to capturing and safely storing up to 50 million metric tons of CO2 per year by 2030 and about 100 million metric tons by 2040.

INEOS is involved in several projects to develop demand for hydrogen, replacing existing carbon-based sources of energy, feedstocks and fuel. It expects to develop further partnerships with leading organisations involved in the development of new applications.

The company has also pledged to reduce its carbon footprint and achieve net-zero emissions by 2050.