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Chesapeake subsidiary sells assets for $135 million

Chesapeake Energy Corp. continues to narrow its focus, with a $135 million deal to move it out of the large-scale natural gas compression business.
By Jay F. Marks, Business Writer Modified: July 14, 2014 at 8:16 pm •  Published: July 15, 2014

Chesapeake Energy Corp. subsidiary MidCon Compression has agreed to sell 162 compression units in Arkansas for about $135 million.

“This sale is a continuation of Chesapeake’s strategy to streamline our overall portfolio to focus on our core assets and essentially completes our exit from the large-scale compression business,” Chesapeake spokesman Gordon Pennoyer said.

Houston-based Exterran Partners LP will acquire the compression units from MidCon.

Most of the units, which are used to pressurize natural gas for transport, are serving BHP Billiton Petroleum in Arkansas’ Fayetteville Shale. The Australian company purchased Chesapeake’s holdings there in 2011 for $4.75 billion in cash.

Exterran will take on the contract operations services agreement with Exterran once its latest deal with MidCon closes.

“We are pleased to acquire an additional fleet of modern, highly standardized assets from MidCon and continue to deliver on our strategy of growing our core contract operations business,” said Brad Childers, CEO and managing general partner of Exterran.

Earlier this year, Exterran bought 334 compression units from MidCon for $360 million. Those units, which serve gathering systems in Oklahoma, Texas, Arkansas, Louisiana and Wyoming, are being leased to Access Midstream Partners LP.

Access, a former Chesapeake subsidiary recently acquired by the Williams Cos. Inc., bought 103 compression units in Ohio, Pennsylvania and West Virginia from MidCon for $160 million. It had been leasing the units.


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