Chespeake Eyes 2012 Oil Services Spin-Off
November 16, 2011 8:45 PM
Chesapeake Energy (NYSE: CHK), the second-largest U.S. natural gas producer, is planning to spin-off its oil services unit next year, CEO Aubrey McClendon said from the Stephens Fall Investment Conference.
Oklahoma-based Chesapeake could retain a stake of around 80% in the services business once it goes public, the Wall Street Journal reported. Chesapeake Oilfield Services LLC would be one of the largest service firms in the U.S., with 114 drilling rigs, a vast trucking fleet and a large hydraulic-fracturing business, the Journal reported.
McClendon says he thinks the services business could be worth $10 billion. Assuming that valuation is accurate, Chesapeake Oilfield Servcices would have a market value on par with the current market caps of Helmerich & Payne (NYSE: HP), Oceaneering (NYSE: OII) and Rowan (NYSE: RDC), just to name a few oil services companies.
Exxon Mobil (NYSE: XOM) is the largest U.S. natural gas producer.
