Shearman & Sterling advised Chesapeake Energy Corporation in its definitive agreements, along with its subsidiary Chesapeake Appalachia, L.L.C., to acquire 100 percent of the interests of Chief E&D Holdings LP (Chief) and associated non-operated interests held by affiliates of Tug Hill, Inc. Pursuant to the terms of the purchase agreements, the Chesapeake buyers will pay the sellers a purchase price of $2.65 billion, consisting of $2 billion in cash and approximately 9.44 million shares of Chesapeake Energy common stock, subject to customary adjustments.

Chief and Tug Hill hold high quality producing assets and an inventory of premium drilling locations in the prolific Marcellus Shale in Northeast Pennsylvania. The cash portion of the transaction will be financed with cash on hand and the use of the company’s revolving credit facility. The transaction, which is subject to customary closing conditions, including certain regulatory approvals, is expected to close by the end of the first quarter of 2022.

Headquartered in Oklahoma City, Chesapeake Energy’s operations are focused on discovering and responsibly developing its large and geographically diverse resource base of unconventional oil and natural gas assets onshore in the United States.

The Shearman & Sterling team below included associates Annie Anderson (New York-Compensation, Governance & ERISA) and Jacquelyn Watson (New York-Compensation, Governance & ERISA).

The Team