On Monday, Chesapeake Energy (CHK) filed documents with the U.S. Securities and Exchange Commission (SEC) as explores the possible separation of its oilfield-services business.
The filings indicate that Chesapeake Energy is preparing to spin off the unit to its shareholders in a tax-free deal. The oil-services unit will change its name to Seventy-Seven Energy prior to the separation. Chesapeake Energy has not revealed specifics about the spin-off’s structure or provided a timetable for the deal, Bloomberg notes.
In the SEC filings, Chesapeake Energy said that it has hired Morgan Stanley (MS) to explore possible options regarding its oilfield-services business.
Chesapeake Energy has said that its oil-services business generates annual revenue of about $2.2 billion. The company revealed that it was considering separating the unit in February.
Shares of Chesapeake Energy fell slightly in Monday morning trading. Over the past year, CHK stock has gained about 12%.