OREANDA-NEWS. March 12, 2014. Chesapeake Energy Corporation (NYSE:CHK) announced that it is pursuing strategic alternatives for its oilfield services division, Chesapeake Oilfield Services (COS), including a potential spin-off to Chesapeake shareholders or an outright sale. COS’ operations are currently conducted through Chesapeake’s wholly owned subsidiary, Chesapeake Oilfield Operating, L.L.C. COS had revenues in 2013 of approximately USD 2.2 billion, and its service offerings include drilling, hydraulic fracturing, oilfield rentals, rig relocation, and fluid handling and disposal.

Led by Chief Executive Officer Jerry Winchester, who previously served as CEO of publicly traded oilfield services company Boots & Coots, Inc., and an experienced management team, COS is well positioned to succeed as a stand-alone company. As of December 31, 2013, COS owned or leased 115 land drilling rigs, including 10 proprietary, fit-for-purpose PeakeRigs™ that utilize advanced electronic drilling technology. Also as of December 31, 2013, COS owned nine hydraulic fracturing fleets with an aggregate of 360,000 horsepower; a diversified oilfield rentals business; an oilfield trucking fleet consisting of 260 rig relocation trucks; 67 cranes and forklifts used to move drilling rigs and other heavy equipment; and 246 fluid hauling trucks.

Chesapeake management believes that COS can maximize its value to Chesapeake shareholders outside of the current ownership structure by, among other things, optimizing the allocation of capital and corporate resources in a manner that focuses on achieving the strategic priorities of Chesapeake and COS. In addition to services performed for Chesapeake, approximately 35% of COS’ marketable drilling rigs are currently working for third-party operators and COS intends to grow its third-party customer base as an independent provider of oilfield services.

Doug Lawler, Chesapeake’s Chief Executive Officer, commented, “COS is an outstanding business with a talented management team that we believe will offer Chesapeake and its shareholders enhanced return opportunities as a stand-alone company. It has provided, and will continue to provide, superior service to Chesapeake’s upstream business, and we look forward to maintaining our close and valuable relationship with Jerry and his team as they pursue COS’ ventures outside of Chesapeake. A separation of COS is aligned with our strategies of financial discipline and profitable and efficient growth from captured resources.”

Winchester added, “We are very excited about this next chapter in COS’ evolution and the tremendous opportunity ahead to grow the company and expand our service offerings for the benefit of Chesapeake, our future shareholders, and each of our outstanding employees. We believe that our separation from Chesapeake will position us to further capitalize on our expertise and capture additional third-party work.”