Chesapeake selling 504,000 DJ acres, production from 29 wells

OKLAHOMA CITY, Okla., Thu May 24, 2012 – Chesapeake Energy Corp. has put 504,000 acres in the DJ Basin in Wyoming and Colorado up for sale, as the U.S. energy company scrambles to raise cash to close a $9 billion to $10 billion funding shortfall.

The deal includes oil and gas production from 29 wells that the company operates and Chesapeake’s interest in 24 nonoperated wells, according to a prospectus on the deal.

Chesapeake, the nation’s second-largest gas producer behind Exxon Mobil Corp and for years one the most active gas drillers, sold off a third of its holdings in the region – then around 800,000 acres – to China’s CNOOC Ltd for nearly $1.3 billion in 2011.

The company faces a 2012 funding shortfall as natural gas prices are the lowest in a decade.

It has already announced that it is looking to sell its 1.5 million acres of lease holdings in the oil-rich Permian basin as well as find a joint venture partner in another liquids-rich region, the Mississippi Lime basin, in order to raise cash.

Analysts and investors have also called for change at the company after Reuters reported that CEO Aubrey McClendon had taken out more than $1 billion in loans using his interest in thousands of company wells as collateral.

Chesapeake shares were down 1.8 percent at $14.82 on Thursday afternoon on the New York Stock Exchange.