Chesapeake Energy looking to oil
A new financial partner for Chesapeake Energy Corp. in the face of decade-low natural gas prices improved the company's stock value last week by 5 percent, settling at $25.55 per share.
Chesapeake announced Monday that it reached an agreement with private equity firm KKR & Co. to invest $250 million. This was the latest move by the company to gain capital as the price of natural gas continues at prolonged lows. Chesapeake hopes to amass between $10 billion and $12 billion this year through joint ventures, asset sales and other moves. The money will help the company shift to more lucrative oil production and "wet gas."
KKR & Co.'s investment follows other private equity groups that have made big bets in the energy market.
Also last week, the price of natural gas, which has fallen for months, hit a decade-long low.
Prices have fallen because of a combination of abundant supplies from shale gas and lack of demand due to a warmer-than-average winter in much of the United States, and long-term de-industrialization of U.S. industries.
Based in Oklahoma City, Chesapeake is a major holder of mineral rights and a key natural gas exploration company throughout the Marcellus region of Pennsylvania.