Chesapeake Energy Corp. will get a payout of about $200 million from the recapitalization of Frac Tech Holdings LLC by a consortium of investors.
Investors Maju Investments, a holding company of Singapore's Temasek Holdings, and RRJ Capital on Monday completed their acquisition of the outstanding equity in Frac Tech, a private oil-field service company based in Fort Worth.
The deal also boosted Chesapeake's stake in the company from 26 to 30 percent. Chesapeake's net investment in Frac Tech is now about $115 million, but company officials believe that stake could be worth at least $1.5 billion by the end of the year.
“We are very pleased to have been an early investor in 2006 in this highly successful company,” Chesapeake CEO Aubrey K. McClendon said. “We look forward to continuing to directly benefit from the financial hedge of our drilling and completion costs that our ownership in Frac Tech provides.”
McClendon and Domenic J. Dell'Osso, the company's chief financial officer, will represent Chesapeake on Frac Tech's five-person board. Frac Tech's CEO is Marc Rowland, who preceded Dell'Osso as Chesapeake CFO.