Chesapeake Energy 2014 Annual Report Download - page 129

CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
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12. Oil and Natural Gas Property Transactions
Under full cost accounting rules, we have accounted for the sale of oil and natural gas properties as an adjustment
to capitalized costs, with no recognition of gain or loss as the sales have not involved a significant change in proved
reserves or significantly altered the relationship between costs and proved reserves.
2014 Transactions
We sold certain assets in the southern Marcellus Shale and a portion of the eastern Utica Shale to a subsidiary
of Southwestern Energy Company for aggregate net proceeds of approximately $4.975 billion. We sold approximately
413,000 net acres and approximately 1,500 wells in northern West Virginia and southern Pennsylvania, of which 435
wells are in the Marcellus or Utica formations, along with related gathering assets and property, plant and equipment.
We exchanged interests in approximately 440,000 gross acres in the Powder River Basin in southeastern Wyoming
with RKI Exploration & Production, LLC (RKI). Under the agreement, we conveyed to RKI approximately 137,000 net
acres and our interest in 67 gross wells with an average working interest of approximately 22% in the northern portion
of the Powder River Basin, where RKI is currently designated operator. In exchange, RKI conveyed to us approximately
203,000 net acres and its interest in 186 gross wells with an average working interest of 48% in the southern portion
of the Powder River Basin, where we are currently designated operator. In addition to the exchange, we paid RKI
approximately $450 million in cash.
We sold noncore leasehold interests in the Marcellus Shale to a subsidiary of Rice Energy Inc. for net proceeds
of approximately $233 million.
We sold noncore leasehold interests, producing properties and 61 wellhead compressor units in South Texas to
Hilcorp Energy Company for net proceeds of approximately $133 million. All commitments related to VPP #5 were also
transferred. See Volumetric Production Payments below.
We sold noncore leasehold interests and producing properties in East Texas and Louisiana for net proceeds of
approximately $63 million. All commitments related to VPP #6 were also transferred. See Volumetric Production
Payments below.
Excluding proceeds received from selling additional interests in our joint venture leasehold described under Joint
Ventures below, we received proceeds of approximately $379 million related to the divestiture of various other oil and
natural gas properties.
2013 Transactions
We sold a wholly owned subsidiary, MKR Holdings, L.L.C. (MKR), to Chief Oil and Gas and two of its working
interest partners, Enerplus Corporation and Tug Hill Operating. Net proceeds from the transaction were approximately
$490 million. MKR held producing wells and undeveloped acreage in the Marcellus Shale.
We sold assets in the Haynesville Shale to EXCO Operating Company, LP (EXCO) for net proceeds of
approximately $257 million. Subsequent to closing, we received approximately $47 million of additional net proceeds
for post-closing adjustments. The assets sold included our operated and non-operated interests in approximately 9,600
net acres in DeSoto and Caddo parishes, Louisiana.
We sold noncore leasehold interests and producing properties in the northern Eagle Ford Shale to EXCO for net
proceeds of approximately $617 million. Subsequent to closing, we received approximately $57 million and $32 million
in 2014 and 2013, respectively, of additional net proceeds and for post-closing adjustments. The assets sold included
approximately 55,000 net acres in Zavala, Dimmit, La Salle and Frio counties, Texas.