Chesapeake Energy announced that it completed the sale of its assets in the Southern Marcellus Shale and a portion of the Eastern Utica Shale to Southwestern Energy.

According to Chesapeake Energy Corporation, its net proceeds from the sale were $4.975 billion. Southwester Energy Company purchased approximately 413,000 net acres and around 1,500 wells located in northern West Virginia and souther Pennsylvania.

Chesapeake Energy Corporation Sells Assets, Approves $1B Stock Buyback

According to Chesapeake Energy Corporation, the assets sold to Southwestern Energy Company achieved a net production of approximately 57,000 barrels of oil equivalend (boe) per day in mid-December. The production represents around 7% of a new company record for total production of 770,000 boe per day that was achieved last week.

Chesapeake explains sale price adjustment

Chesapeake Energy Corporation explained that there was a $400 million adjustment to the previously reported sale price of $5.375 billion. The price adjustment was related to a settlement for different item including Southwestern Energy Company’s waiver of any future claims related to title defects and environmental liabilities.

Doug Lawler, chief executive officer of Chesapeake Energy Corporation said the transaction is another milestone for the company’s transformation. It also solidifies the strong financial position of the company.

“With the closing of this transaction and the available borrowing capacity under our unsecured revolving credit facility, Chesapeake now has a liquidity position of approximately $9 billion, putting Chesapeake in an advantageous position to enhance shareholder value in this volatile commodity price market,” said Lawler.

Chesapeake shares authorization program

In addition, the board of directors of Chesapeake Energy Corporation approved a $1 billion stock buyback program as part of the company’s focus on enhancing shareholder value.

The second largest natural gas producer in the United States also indicated that its management will focus on additional strategic growth opportunities to improve its asset portfolio.

Chesapeake Energy Corporation will also continue to improve its ability to deliver top quartile metrics and shareholder returns.

The stock of Chesapeake Energy Corporation was trading at $20.26 per share, up by 10% at the time of this writing, 15 minutes before the market close in New York.