Submitted by Fox First at Ten on June 8th
OKLAHOMA CITY (AP) - Chesapeake Energy is selling its pipeline assets in three separate deals for a total of more than $4 billion in cash.
Chesapeake will sell its ownership stake in its Chesapeake Midstream Partners LP pipeline company to Global Infrastructure Partners for about $2 billion, the Oklahoma City natural gas producer said Friday.
Chesapeake expects to receive the first half of the proceeds on June 15, with a final closing and the second half of the payment expected to occur by June 29.
The company also will sell certain mid-continent gathering and processing assets to Chesapeake Midstream Partners. In a separate deal, Global Infrastructure Partners will buy the company's interests in its Chesapeake Midstream Development LP subsidiary.
Chesapeake expects cash proceeds of more than $2 billion from those two deals.
The sales will allow Chesapeake to cut its capital spending by about $3 billion over three years, it said. Chesapeake is under pressure to sell assets and cut spending to reduce debt.
To date this year, the company has announces asset sales totaling $6.6. billion.
The news of the latest sale comes on the same day as Chesapeake's annual shareholder meeting.
A group of Chesapeake shareholders has expressed concern about CEO Aubrey McClendon's compensation and whether loans he secured against his stake in company wells could have influenced the company's business decisions and value to shareholders.
Chesapeake has said the Securities and Exchange Commission has opened an "informal inquiry" into whether the well program created potential conflicts of interest.
Chesapeake Energy Corp., along with other natural gas companies, has been hit hard by falling natural gas prices. Its shares rose 6 cents to $17.91 in premarket trading.
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