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Ohio Utica Shale

Chesapeake Oilfield Services to sell shares

By Bob Downing Published: April 17, 2012

Chesapeake Energy Corp., a leading player in Ohio’s Utica shale, intends to sell shares in its hydraulic-fracturing business to raise $862.5 million, at a time when natural gas prices are low, Bloomberg News reported.

Chesapeake Oilfield Services Inc. plans to use the proceeds from the initial offering to repay debt, make a cash distribution to its parent company and for general corporate purposes, according to a company prospectus filed on Monday.

The shares will list on the New York Stock Exchange as COS.

Goldman Sachs Group and Bank of America Corp. will lead the offering, said Oklahoma-based Chesapeake Oilfield.

The number of shares to be sold or their price range weren’t specified in the filing.

The oil field unit was reorganized into a separate unit last October in preparation for becoming publicly traded.

Last November, Chesapeake Chief Executive Officer Aubrey McClendon estimated the initial value of the business at $5 billion to $7 billion.

The company operates 111 drilling rigs and has 12 more under construction. It operates four hydraulic fracturing fleets with plans to double that number by Dec. 31.

Chesapeake has been selling stakes in natural gas and oil field to raise cash for drilling and to reduce a growing corporate debt. Its debt reached $10.3 billion at the end of 2011.

Last week, Chesapeake announced $2.6 billion in assets and future commodity sales and plans to generate another $14.9 billion in transactions by the end of 2013. Over the years, the company has sold off assets in numerous shale gas plays around the country.

Chesapeake is aggressively pursuing development of its leased holdings in Ohio where ethane, propane and butane deposits plus natural gas make such projects lucrative, even with low natural gas prices.

It is the No. 2 producer of natural gas in the United States.

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Utica and Marcellus shale web sites

Ohio Department of Natural Resources' Division of Oil and Gas Resources Management State agency Web site.

ODNR Division of Oil and Gas Resources Management. State drilling permits. List is updated weekly.

ODNR Division of Geological Survey.

Ohio Environmental Protection Agency.

Ohio State University Extension.

Ohio Farm Bureau.

Ohio Oil and Gas Association, a Granville-based group that represents 1,500 Ohio energy-related companies.

Ohio Oil & Gas Energy Education Program.

Energy In Depth, a trade group.

Marcellus and Utica Shale Resource Center by Ohio law firm Bricker & Eckler.

Utica Shale, a compilation of Utica shale activities.

Landman Report Card, a site that looks at companies involved in gas and oil leases.FracFocus, a compilation of chemicals used in fracking individual wells as reported voluntarily by some drillers.

Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.

Rig Count Interactive Map by Baker Hughes, an energy services company.

Shale Sheet Fracking, a Youngstown Vindicator blog.

National Geographic's The Great Shale Rush.

The Ohio Environmental Council, a statewide eco-group based in Columbus.

Buckeye Forest Council.

Earthjustice, a national eco-group.

Stop Fracking Ohio.

People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.

Concerned Citizens of Medina County, a grass-roots group.

No Frack Ohio, a Columbus-based grass-roots group.

Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.

Penn State Marcellus Center.

Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.

Allegheny Front, environmental public radio for Western Pennsylvania.