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Chesapeake Energy sells US assets to Southwestern for $5.4 bn

US benchmark West Texas Intermediate for July delivery rose 67 cents to $50.36 a barrel on the New York Mercantile Exchange, capping a rally from the low near $25 a barrel

Chesapeake Energy plans to sell a package of shale oil production assets and undrilled acreage in the United States to Southwestern Energy for $5.4 billion, the companies announced Thursday.

The deal covers 413,000 acres of land in the US states of West Virginia and Pennsylvania that currently produce about 56,000 barrels of oil equivalent per day, about eight percent of Chesapeake's output.

The transaction, expected to close in the fourth quarter, follows a string of other deals as US shale production soars. The recent 25 percent drop in oil prices since June is partly due to rising output in the US.

Southwestern said the properties complement shale assets the company already owns in Pennsylvania.

In pre-market trade, Chesapeake jumped 9.6 percent to $19.47, while Southwestern fell 7.4 percent to $33.06.