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Chesapeake to Spin Off Its Oilfield Services Division
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OKLAHOMA CITY -- Chesapeake Energy Corp. plans to get out of the well-drilling and oilfield services business by either spinning off its Chesapeake Oilfield Services division to shareholders or through “an outright sale.’
The announcement was made this morning.
“A separation of COS is aligned with our strategies of financial discipline and profitable and efficient growth from captured resources,” said Chesapeake’s CEO, Doug Lawler, in a statement.
Chesapeake Oilfield Services reports 2013 revenues of $2.2 billion; its service offerings include drilling, hydraulic fracturing, oilfield rentals, rig relocation, and fluid handling and disposal.
Its operations are conducted through Chesapeake’s wholly owned subsidiary, Chesapeake Oilfield Operating LLC.
As of Dec. 31, Chesapeake Oilfield Services owned or leased 115 land drilling rigs, including 10 proprietary, fit-for-purpose PeakeRigs™ that use advanced electronic drilling technology. At year-end, the division also owned nine hydraulic fracturing fleets, a diversified oilfield rentals business; an oilfield trucking fleet consisting of 260 rig relocation trucks; 67 cranes and forklifts used to move drilling rigs and other heavy equipment; and 246 fluid hauling trucks.
In addition to services performed for Chesapeake, 35% of the division’s marketable drilling rigs are currently working for third-party operators and the intent is to grow its third-party customer base as an independent provider of oilfield services.
In its announcement of the spin-off, Chesapeake said its management “believes that COS can maximize its value to Chesapeake shareholders outside of the current ownership structure by, among other things, optimizing the allocation of capital and corporate resources in a manner that focuses on achieving the strategic priorities of Chesapeake and COS.”
Chesapeake Energy is the second-largest producer of natural gas and the 11th largest producer of oil and natural gas liquids in the United States.
SOURCE: Chesapeake Energy Corp.
Published by The Business Journal, Youngstown, Ohio.
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