Chesapeake Energy Corp. (CHK) plans to sell its midstream assets in three separate transactions for estimated cash proceeds of over $4.0 billion. Further, the midstream divestitures would enable Chesapeake to reduce previously budgeted capital expenditures by nearly $3.0 billion over the next 3 years.
Chesapeake has agreed to sell its limited partner units and its general partner interests in Chesapeake Midstream Partners L.P. (CHKM) to Global Infrastructure Partners or GIP for $2.0 billion cash proceeds, and also expects to receive the first half of the proceeds on June 15, 2012 with a final closing and payment of the second half of the proceeds slated to occur by June 29, 2012.
In addition, Chesapeake inked a letter agreement with CHKM on the potential sale of certain Mid-Continent gathering and processing assets to CHKM and a separate letter agreement with GIP for the sale of the company's interests in its wholly owned unit, Chesapeake Midstream Development L.P. (CMD) to GIP. Chesapeake expects total cash proceeds of over $2.0 billion from these two transactions.
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