Water hauling included in Chesapeake’s spin-off of oilfield services business

June 11, 2014

Chesapeake Energy Corporation has announced it is spinning off its oilfield services business unit into a stand-alone, publicly traded company called Seventy Seven Energy Inc (SSE). The spin-off has been approved by the Chesapeake Board of Directors.

Headquartered in Oklahoma City OK, Seventy Seven Energy, which currently operates as Chesapeake Oilfield Operating LLC, provides a wide range of wellsite services and equipment to US land-based exploration and production customers operating in unconventional resource plays. SSE’s services include drilling, hydraulic fracturing, oilfield rentals, rig relocation and water transport and disposal, and its operations are geographically diversified across many of the most active oil and natural gas plays in the onshore United States, including the Anadarko and Permian basins and the Barnett, Eagle Ford, Haynesville, Marcellus, Niobrara, and Utica shales.

The two companies will be separated through the distribution of SSE common stock to holders of Chesapeake common stock on a pro rata basis. Chesapeake shareholders will receive one share of SSE common stock for every 14 shares of Chesapeake common stock held at the close of business on the record date of June 19, 2014. Subject to the satisfaction of the conditions to closing, the distribution is expected to occur following the close of business on June 30.

Upon completion of the spin-off, Jerry L Winchester and Cary D Baetz will remain as chief executive officer and chief financial officer, respectively, of SSE. The board of directors of SSE is expected to consist of Jerry L Winchester, Anne-Marie N Ainsworth, Bob G Alexander, Edward J DiPaolo, Tucker Link, Marran H Ogilvie, Ronnie Irani, and Alvin Bernard Krongard.

Morgan Stanley & Co LLC is acting as financial advisor to Chesapeake in connection with the spin-off. Baker Botts LLP and McAfee & Taft are acting as legal advisors to Chesapeake in connection with the spin-off while Wachtell, Lipton Rosen & Katz is advising the Chesapeake board of directors.