OKLAHOMA CITY (AP) — Chesapeake Energy Corp. has filed regulatory paperwork for a possible spinoff its oilfield services business unit.
The Oklahoma City-based natural gas company said in February that it was considering selling or spinning off the unit to help maximize shareholder value.
Chesapeake said Monday that the spinoff will be tax-free to its shareholders. It has not determined the exact scope or timing of the spinoff, according to the paperwork filed with the U.S. Securities and Exchange Commission. It has retained Morgan Stanley & Co. LLC as its financial adviser in connection with the deal.
The division is expected to change its name to Seventy Seven Energy Inc. as part of the spinoff. The unit posted a profit of $19.9 million on revenue of $1.3 billion in 2011, the most recent fiscal year included in the SEC filing.
Chesapeake Energy is the second-largest producer of natural gas and tenth-largest producer of oil and natural gas liquids in the U.S.
Shares of Chesapeake fell 19 cents to $24.84 by midday Monday amid a broader market uptick.