Chesapeake Energy sells assets worth $2.6 bn to reduce debt, fund development
10 April 2012
Chesapeake Energy, the second- largest natural-gas producer in the US, yesterday said that it sold assets worth $2.6 billion in order to reduce debt and fund development.
Oklahoma-based Chesapeake has sold one of its subsidiary, CHK Cleveland Tonkawa (CHK C-T), and a 3.75-per cent royalty interest in the first 1,000 new net wells to be drilled on CHK C-T leasehold and certain wells to investment group led by Blackstone Group affiliate that includes TPG Capital and EIG Global Energy Partners, for $1.25 billion.
CHK C-T owns approximately 245,000 net leasehold acres in the Cleveland and Tonkawa unconventional liquids-rich tight sand plays in Roger Mills and Ellis counties, Oklahoma. Chesapeake has retained all the common equity interests in CHK C-T.
Chesapeake also agreed to sell Morgan Stanley 10 years of future gas output from the Anadarko Basin Granite Wash for about $745 million.
The transaction included approximately 160 billion cubic feet of natural gas equivalent (bcfe) of proved reserves and current net production of an estimated 125 million cubic feet of natural gas equivalent (mmcfe) per day.
Chesapeake also sold approximately 58,400 net acres of leasehold in the Texoma Woodford play in Bryan, Carter, Johnston and Marshall counties in Oklahoma to XTO Energy Inc., a subsidiary of Exxon Mobil, for approximately $590 million in cash.