WASHINGTON - Chesapeake Energy Corp, the second-largest producer of natural gas and the 11th largest producer of oil and natural gas liquids in the U.S, has sold assets in the Southern Marcellus Shale and a portion of the Eastern Utica Shale in West Virginia to Southwestern Energy Company for $5.375 billion.

The sold assets, located in northern West Virginia and southern Pennsylvania, include 413,000 acres and 1,500 wells, the company said Thursday.

None of the sold-off land is in Ohio, where Chesapeake has more than 1 million acres.

The transaction, which is subject to certain customary closing conditions, including the receipt of third-party consents, is expected to close in the fourth quarter of 2014.

Chesapeake Energy stock rallied 13.7% in early trading Thursday, rising up from its 52-week low of $16.69 experienced Wednesday. On the other hand, Southwestern Energy Company stock declined 7.4% and has recorded a new 52-week low of $32.15.

Chesapeake has agreed to sell approximately 413,000 net acres and approximately 1,500 wells in Northern West Virginia and Southern Pennsylvania, of which 435 are in the Marcellus and Utica formations, along with related property, plant and equipment.

Average net daily production from these properties was approximately 56,000 barrels of oil equivalent (boe) during the month of September, consisting of 184,000 Mcf of gas, 20,000 barrels of natural gas liquids and 5,000 barrels of condensate. As of December 31, 2013, net proved reserves associated with these properties were approximately 221 million barrels of oil equivalent (mmboe).

The deal marks a major foray into the Marcellus shale play and the first entry into the Utica play for Houston-based Southwestern, and another move by Oklahoma City-based Chesapeake's efforts to shed assets.

Before this deal, Chesapeake had sold off this year about $3 billion worth of assets including gas fields, office buildings, pipelines, and drill rigs acquired under former CEO Aubrey McClendon, who was ousted last year. McClendon has become a major player again in Appalachian shale with a new company.

"Today's announcement marks a major step in Chesapeake's transformation and a dramatic improvement in our financial strength as we seek to maximize value for our shareholders," Chesapeake CEO Doug Lawler said in a statement.

"Earlier this year, we committed to unlocking the significant value inherent in this asset, recognizing the disconnect of its perceived value within our portfolio."

Chesapeake still has about 230,000 acres in northern Pennsylvania and a smaller amount of older wells in southern West Virginia's Devonian shale play, which sits atop the Marcellus and Utica shale formations.

The company expects its full-year production guidance for 2015 to remain in the range of 7-10% growth from 2014 levels adjusted for asset sales

Lawler said in an email to employees Thursday morning that he would hold a town hall meeting Monday morning to discuss the transaction and long-term growth plans for Chesapeake.