Economy and Business
Thursday, August 16, 2012
Chesapeake land sale ends Friday
Chesapeake Energy sells land rich in oil and gas.
by WKSU's SIMON HUSTED |
Reporter
Simon Husted | | |
| Energy companies have until the end of Friday to bid on the oil and gas drilling rights for nearly 340,000 acres of Ohio’s Utica shale.
The properties are scattered across 19 eastern Ohio counties, including in Summit, Portage, Lorain and Trumbull counties.
About five years ago, Chesapeake Energy began gobbling up the mineral rights to more than a million acres of land in eastern Ohio. But so far, it’s actually drilled very few wells into the shale.
Now it wants to sell about a quarter of its leases to help pay off its $13 billion debt.
Mark Hanson is an industry analyst at Morningstar and says the sale may just be enough to help with Chesapeake’s cash-flow problems. But with such a limited history of drilling, he says most buyers are going to want a discounted price. |
“I think they generally know what is in the ground," Hanson says. "The question is how you effectively extract it and at what price are you able to do so. That is the uncertainty right now. There’s just not a lot of data out there for a buyer to come in and validate exactly how many hydro carbons can be extracted and at what price and at what cash flow.”
Hanson says companies including Devon Energy, Chevron, Anadarko, BP, Exxon and Hess are likely interested in the leases. For the most part, property owners will have no say when the leases transfer. |
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