The natural gas and oil exploration and production company said the transaction is expected to close today, and it will retire Chesapeake's highest cost leverage instrument, and eliminate approximately $75 million in annual cash dividend payments to third party preferred shareholders.
Chesapeake also announced an acreage exchange with the privately held RKI Exploration & Production LLC in the Powder River Basin in Wyoming.
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The company said it would pay $450 million to RKI and give the company 137,000 net acres and its interest in 67 gross wells in the northern part of the basin.
In exchange, RKI will give Chesapeake close to 203,000 net acres and interest in 186 gross wells in the southern region of the basin.
Shares of Chesapeake Energy are up 0.26% to $26.91 in mid-morning trading on Tuesday.
Separately, TheStreet Ratings team rates CHESAPEAKE ENERGY CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHESAPEAKE ENERGY CORP (CHK) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."