Chesapeake announces sale of pipeline assets
Chesapeake Energy Corp. will net more than $4 billion from the sale of its pipeline assets, the company announced Friday.
Chesapeake Midstream Partners LP is about to become a subsidiary of Global Infrastructure Partners LP.
Chesapeake Energy Corp. announced the $4 billion deal for its pipeline subsidiary just hours before its annual shareholder meeting Friday.
Expanded Chesapeake coverage
Chesapeake coverage on NewsOK:
“We have been working for the past few months to monetize our substantial and valuable midstream assets and are pleased to announce the sale of our investments in CHKM and a plan to sell our remaining midstream assets at attractive prices,” CEO Aubrey McClendon said.
McClendon said the company's ongoing asset sales are on track to generate as much as $14 billion this year as Chesapeake tries to change its focus to oil and liquids production.
The Chesapeake Midstream deal will allow Chesapeake to reduce its budgeted capital expenditures by about $3 billion over the next three years.
Global Infrastructure will pay $2 billion for Chesapeake's partnership interests in its pipeline subsidiary. The private equity firm helped Chesapeake form the midstream partnership three years ago.
Chesapeake also will net more than $2 billion from selling natural gas gathering and processing assets to Chesapeake Midstream and its stake in Chesapeake Midstream Development LP to Global Infrastructure.
The deals will give Global Infrastructure full ownership of Chesapeake Midstream's general partner and 69 percent of its common units.