Southwestern Paid Chesapeake $12K/Acre for Land Signed @ $5/Acre

Last week MDN told you that Chesapeake Energy closed on a deal to sell some 413,000 Marcellus Shale acres, mostly in West Virginia (some in Pennsylvania) to Southwestern Energy (see Chesapeake Using $1B from Southwestern Deal to Buy Back Stock). The deal ended up being worth $4.975 billion, discounted from the original $5.375 billion because Southwestern agreed not to sue Chessy for “title defects” when and should that occur. As we said at the time, we’re not sure if a $400 million discount is a good deal or not in the case some of the titles to leases aren’t free and clear. But the bigger story, in our humble opinion, is this: Chesapeake picked up some of those leases that originally paid landowners as little as $5 per acre and as much as $5,000 per acre. They just turned around and sold those same leases for $12,000 an acre. That made corporate raider Carl Icahn, Geppetto pulling the strings at Chesapeake, really really happy…

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