Chesapeake Files Registration To Spin-Off Oilfield Unit
Chesapeake Energy (NYSE: CHK) on Monday announced that Chesapeake Oilfield Operating, LLC has filed a Form 10 Registration Statement with the U.S. Securities and Exchange Commission regarding the spin-off of the Chesapeake Oilfield Services.
The Form 10 Registration states that Chesapeake Energy's board of directors has approved the spin-off of its subsidiary Seventy Seven Energy, previously known as Chesapeake Oilfield Operating, LLC. The spin-off will be through a pro rata stock distribution to Chesapeake's shareholders. Seventy Seven Energy intends to apply to trade on the New York Stock Exchange under the ticker symbol “SSE.”
Chesapeake noted that prior to the completion of the spin-off, Chesapeake Oilfield Operating will change its name to Seventy Seven Energy. In the press release and Form 10 Registration, Chesapeake emphasized that the company intends the spin-off to be tax-free to shareholders. The press release states, “To that end, Chesapeake has obtained a private letter ruling from the Internal Revenue Service and expects to obtain an opinion of tax counsel regarding the tax treatment of the spin-off.”
Last month, Chesapeake commented that it was considering to sell or spin off the oilfield unit. The segment reported $2.2 billion in revenue last year and is capable of working as an individual firm.
The company retained Morgan Stanley as its financial adviser to examine alternative options for Chesapeake Oilfield Operating.
Shares of Chesapeake Energy are up 11 percent in the past 12 months. The stock closed at $25.03 on Friday and is currently trading at $24.76, down 1.08 percent.
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