The troubled Chesapeake Energy Corp. (NYSE:CHK), the second-largest producer of natural gas in the country, announced Friday it has made a significant discovery of crude oil and natural gas in the Anadarko Basin beneath the Texas Panhandle and western Oklahoma.
Chesapeake said two horizontal wells drilled in the Hogshooter play in the Anadarko Basin have produced more than 100,000 barrels of oil equivalent, or BOE, in the past month.
One well produced a combined 68,400 BOE in its first 13 days, including five days of testing, and the other well produced 57,000 BOE in its first 27 days, the company said.
Chesapeake owns about 30,000 net acres in the play, and it intends to drill at least 65 more wells in the area during the next few years, the company said.
We expect this new Hogshooter discovery to provide a significant boost to Chesapeake's focus on harvesting its existing assets for growth and value creation rather than on pursuing new leasehold, said CEO Aubrey K. McClendon.
The discovery could be a boost to the company, which is struggling with debt after acquiring millions of acres in shale leases throughout the country.
Chesapeake had previously announced it will have to sell billions of dollars in assets this year.
In May, the company took out a $4 billion loan to remain liquid, amid falling natural-gas prices that are hurting revenue.
McClendon said he hopes the Hogshooter discoveries will help the company financially: [T]his new Hogshooter development area should further enhance our growing liquids production, which we expect will have transformational effects on our company's operational and financial performance in the years ahead.
In Friday trading, Chesapeake stock closed down $1.32, or 7.81 percent, to $15.72. The price is down by more than 50 percent from its 52-week high of $35.75.