The natural gas and oil in Ohio’s Utica Shale is going to help Chesapeake Energy’s debt-ridden balance sheet — whether Chesapeake is the firm that extracts the fuels or not.
Through a listing on the website of Meagher Energy Advisors, Chesapeake has put more than 337,000 acres across 19 eastern Ohio counties up for sale — about one-fourth of the company’s total Utica holdings.
More than 80 percent of the land for sale is held-by-production, meaning landowners are locked into current contracts and cannot renegotiate for more money with a new company. Chesapeake said the areas where it is looking to sell are places where its land ownership is less concentrated and company leases aren’t as side-by-side as in other parts of the state.
The Oklahoma City driller is the biggest in the country to have such a substantial stake and financial obligation in Ohio’s counterpart to the Marcellus Shale region. In the past, Chesapeake has promised such lucrative returns from that area that beleaguered CEO Aubrey McClendon called it “the biggest thing economically to hit Ohio, since maybe the plow.”
Scattershot public data haven’t stopped Mr. McClendon from extolling the promise of the Utica, continuing a “trust me” line to shareholders while offering little evidence to fact-check those claims. Ohio regulators generally wait months before receiving production reports from Chesapeake, and industry analysts say the company’s sky-high estimates fall back to earth as more information is revealed.