Chesapeake Energy Corp said it would spin off its oilfield services business, less than a month after it said it was pursuing strategic options, including a sale, for the division.
The spin-off would enable each its two businesses – exploration and production, and oilfield services – to better leverage opportunities, Chesapeake said in a filing with the U.S. Securities and Exchange Commission.
“In addition, we believe that the two companies, each with its own financial and operating characteristics, will appeal to a wider combined investor base,” Chesapeake said in the filing by Chesapeake Oilfield Operating LLC.
The division provides equipment to U.S. land-based exploration and production companies and offers services such as drilling, hydraulic fracturing, oilfield rentals and rig relocation.
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The business’s revenue rose to about $2.2 billion in 2013 from $1.9 billion in 2012, according to the filing.
Chesapeake said it would not retain any ownership interest in the new company.
Once it is spun off, the company will be named Seventy Seven Energy Inc and will apply to list its common stock on the New York Stock Exchange under the ticker symbol “SSE”.
Chesapeake said it has retained Morgan Stanley & Co. LLC to evaluate strategic options for the business, Chesapeake Oilfield Operating LLC.