27 Feb 2014 More

Chesapeake Energy Weighs Oilfield Options

posted by Unknown @ 09:34 0 Comments

Chesapeake Energy storage tanks
Chesapeake Energy announces that it will start looking for alternative strategies when it comes to its oilfield services unit.  The natural gas company is right now in the midst of a restructuring effort.

Chesapeake Oilfield Services generated revenues of $2.2 billion for 2013 and competes with rival energy companies like Schlumberger and Halliburton.  COS is in the business of hydraulic fracturing, equipment rentals, and drilling among many others.

Chesapeake is currently considering selling off the oilfield services business, this according to CEO Jerry Winchester.  The company believes that selling it or even spinning it off could help to generate more projects.  Right now, somewhere in the neighborhood of 35 percent of the company’s rigs work for 3rd-party operators.

“COS is an outstanding business with a talented management team that we believe will offer  Chesapeake and its shareholders enhanced return opportunities as a stand-alone company,” says Chesapeake CEO Doug Lawler.

Initial Public Offering not likely

Chesapeake had been planning an IPO for its oilfield services unit.  Chesapeake Energy, the parent company, is the 2nd largest producer of natural gas in the United States behind Exxon/Mobil.  Since the original plan back in 2012, however, new CEO Lawler has decided it may be more prudent for the company to go ahead and cut costs. 

Lawler states that he wants the company to turn its focus to the more lucrative aspects of its business.  Chesapeake slashed more than 800 jobs through October 2013.   It has also sold off $1 billion in assets with its deal with EXCO Resources.

“A separation of COS is aligned with our strategies of financial discipline and profitable and efficient growth from captured resources,” says Lawler.

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