OKLAHOMA CITY (AP) -- Chesapeake Energy Corp. said Monday that it completed a series of deals worth roughly $7 billion deal to sell off vast portions of its land and infrastructure in Texas to a number of buyers.
The company is trying to shift its focus to oil drilling from natural gas, as the price for natural gas has plunged due to oversupply and soft demand.
Chesapeake announced in September that it would sell assets in the Permian Basin through a series of deals with Royal Dutch Shell PC and Chevron Corp. That follows an earlier deal with EnerVest Ltd.
The company said that the Permian Basin assets being sold produced about 21,000 barrels of liquids and 90 million cubic feet of natural gas per day during the second quarter of 2012, which represents roughly 5.7 percent of Chesapeake's production during the quarter.
Chesapeake said total proceeds from the three transactions, including some preferential rights exercised by other parties, totaled $3.3 billion. Of that, Chesapeake received approximately $2.8 billion in cash at closing. The payment of the remaining proceeds will come after it meets certain regulatory and other measures.
Chesapeake plans to use the proceeds to lower the balance on its existing term loans from $4 billion to approximately $1.2 billion by the end of the month. The company plans to fully repay the term loans by the end of 2012.
The company accumulated enormous levels of debt in recent years as it rushed to acquire land and other assets and now is looking to lower that load.
Jefferies & Company, Inc. and Goldman, Sachs & Co. served as financial advisors to Chesapeake on the three deals.
Chesapeake shares fell 2 cents to close at $20.79.