Saturday, September 8, 2012

Chesapeake to Sell Fort Worth Office Tower

Five years ago, Chesapeake Energy bought a 20 story office tower in Fort Worth, then the epicenter of shale drilling, for $104 million, which represented 60% more than its appraised value.  (Overpaying - does that sound familiar?)  Today, with shale gas drilling as popular as the flu, Chesapeake is looking to sell what is now known as Chesapeake Plaza.

The current assessed value is $62.7 million (just a few million dollars below the appraised value five years ago), but in the current commercial property market, who knows what it might go for.  Chesapeake needs the cash to fund its drilling program, but it has already felt the financial pain, having booked a $219 million loss for this asset last quarter.  These days, Chesapeake is only running two rigs in the Barnett Shale and two in the Haynesville, so holding onto expensive real estate in the region just doesn't make sense.

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