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Chesapeake Energy in land deal with China's Sinopec for US$1.02 billion

OKLAHOMA CITY -- Chesapeake Energy said on Monday that it will sell a 50 percent stake in oil and natural gas-rich land in Oklahoma to Chinese oil company Sinopec for US$1.02 billion as the natural gas producer continues selling off assets to repay debt.

Chesapeake is the second-largest producer of natural gas in the U.S. after Exxon Mobil. Hurt by low natural gas prices, it has sold off billions in assets to pay off debt incurred as it rushed to buy land and other assets. It's also increasingly focused on more lucrative oil and gas liquids.

The company posted a US$940 million loss last year because of a big charge to write down the value of its natural gas-producing property.

The deal with Sinopec “moves us further along in achieving our asset sales goals and secures an excellent partner to share the capital costs required to actively develop this very large, liquids-rich resource play,” said Steven Dixon, Chesapeake's chief operating officer.

The company is aiming for US$4 billion to US$7 billion in asset sales this year.

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