Chesapeake Deals Mississippi Lime


Chesapeake Energy has now agreed to sell a stake of its Mississippian Lime assets, receiving $1.02 billion for its 425 thousand acres, or about $2,400 per acre. While this is lower than analysts had expected the company to make in this deal, Motley Fool energy analyst Joel South tells us in this video why this is a prudent move for the company. The move not only continues to reduce Chesapeake's funding gap, but is also in line with its longer-term strategy of moving away from plays that have a high percentage of natural gas, such as the Mississippian, and concentrating more heavily on the higher-margin oil plays, such as the company's assets in the Eagle Ford.

Energy investors would be hard-pressed to find another company trading at a deeper discount than Chesapeake Energy. Its share price depreciated after negative news surfaced concerning the company's management and spiraling debt picture. While these issues still persist, giant steps have been taken to help mitigate the problems. To learn more about Chesapeake and its enormous potential, you're invited to check out The Motley Fool's brand-new premium report on the company. Simply click here now to access your copy, and as an added bonus, you'll receive a full year of key updates and expert guidance as news continues to develop.

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Joel South has no position in any stocks mentioned. The Motley Fool recommends Chevron. The Motley Fool has the following options: Long Jan 2014 $20 Calls on Chesapeake Energy, Long Jan 2014 $30 Calls on Chesapeake Energy, and Short Jan 2014 $15 Puts on Chesapeake Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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