Chesapeake Energy agreed to sell its Barnett Shale holdings to Saddle Operating, exiting the birthplace of the U.S. shale boom, as another way to pay debts during the downturn.
By selling its Barnett Shale acreage, Chesapeake is escaping nearly $2 billion in pipeline contracts and slashing its shipping and processing costs by $715 million between now and the end of 2017.
What was once the starting point for the U.S. shale boom, the Barnett Shale in Texas became less relevant as gas prices fell and Marcellus and Utica shales were discovered. The Barnett is Chesapeake’s second-smallest production region, accounting for 10 percent of its output.
After Chesapeake’s announcement of its selling strategies on Wednesday, Chesapeake shares rose more than 5 percent in after-hours trading.