Oklahoma based Chesapeake Energy has revealed plans to sell US$ 4 billion worth of assets to fill a funding gap of approximately US$ 10 billion.
The company, which is undergoing intense scrutiny in the wake of revelations about CEO Aubrey McClendon financial activities, has announced that it plans to sell limited partner units and general partner interests in a subsidiary known as Chesapeake Midstream Partners LP. The sale will be made to GIP for US$ 2 billion.
Chesapeake has also entered into another agreement with GIP that will see the sale of gathering and processing assets and a stake in another subsidiary, Chesapeake Midstream Development LP. If these two sales go ahead, they should net at least a further US$ 2 billion.
The company has also announced it is looking for a partner in the Mississippi Lime basin as well as outlining plans to sell 1.5 million acres of the Permian basin and a further 337 000 acres in Ohio. According to McClendon, the sale of Permian acreage and the hunt for a joint venture partner should both have been completed by the end of this year.
Fadel Gheit, an analyst for Oppenheimer & Co was recorded by Reuters saying that, “We have not seen a fire sale … we are not out of the woods yet … You are still talking about a huge, huge capital spending deficit.”
Edited from various sources by David Bizley
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