Chesapeake sells assets for more than $2.16 billion
Chesapeake Energy Corp. has agreed to sell most of its remaining midstream assets for $2.16 billion to its former pipeline subsidiary in a deal that will be partially bankrolled by Tulsa-based Williams Cos. Inc.
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Chesapeake is selling natural gas pipeline, compression and storage facilities in several major shale plays to Access Midstream Partners, while Williams will pay about $2.4 billion to buy a stake in Access and its general partner.
Williams CEO Alan Armstrong said the deal is a strategic investment meant to create long-term value for the company and its shareholders.
“With ACMP's planned acquisition of most of Chesapeake's remaining midstream business, our investment also provides us with an interest in assets in some of the best acreage positions in prolific and economically durable shale plays,” Armstrong said. “As well, Oklahoma-based Chesapeake leads ACMP's diverse customer base of U.S. and international integrated majors and large independent producers.”
Chesapeake's continuing asset sales will push to company closer to its goal of raising $14 billion this year to offset a looming cash crunch. The company also plans to raise up to $19 billion next year.
“We are pleased to announce further progress toward our asset sale goals for 2012-2013,” Chesapeake CEO Aubrey McClendon said. “We look forward to completing additional asset sales and achieving our goals of strengthening our balance sheet, tightening our asset focus and increasing returns to shareholders.”
Chesapeake also said Tuesday it has recently completed the sale of other midstream assets in Oklahoma and Texas during the fourth quarter for about $175 million.
The company expects to complete the sale of its remaining midstream assets by the end of the first quarter of 2013 for about $425 million. Proceeds are expected to total $4.875 billion. In September, Chesapeake said it expected to receive about $5 billion for the total sale.
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