Chesapeake Energy Corp. has sold a five-year volumetric production payment (VPP) to an affiliate of Barclays Bank PLC for proceeds of $1.15 billion related to its production from the Barnett Shale of North Texas. The deal, which closed on Sept. 30, includes about 390 Bcf of proved reserves and about 280 MMcf/d net production in 2011. Chesapeake retained drilling rights on the properties below currently producing intervals and outside existing producing wellbores. Since December 2007 Chesapeake has completed eight VPP transactions and monetized approximately 1 Tcfe of proved reserves for combined proceeds of approximately $4.7 billion, or approximately $4.70/Mcfe (see Daily GPI, May 6). Earlier this year Chesapeake announced a reorganization of its natural gas operations in a plan to raise up to $5 billion to repay up to $3.5 billion of senior debt and to increase its investment in liquids-rich plays by up to $1.5 billion (see Daily GPI, May 11). Jefferies & Company Inc. was adviser to Chesapeake on the latest VPP transaction.
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