Tuesday, September 29, 2009

Chesapeake Energy launches pipeline company limited partnership

FORT WORTH, Texas - Oklahoma City-based Chesapeake Energy, which has a large regional office in Fort Worth, said late on Sept. 24 that it will raise $588 million in cash by selling half its natural gas pipelines in the Barnett Shale of North Texas, as well as properties in other petroleum basins.
Chesapeake, a major Barnett gas producer, said it has entered into a definitive agreement to form a joint venture with Global Infrastructure Partners, a New York-based private equity fund. Chesapeake will contribute the Barnett Shale pipelines and processing facilities, called "midstream assets," to the new Chesapeake Midstream Partners Llc.
GIP will pay $588 million for its 50 percent interest in CMP, and Chesapeake will retain the other half.
Chesapeake said in May that it was in talks with four potential bidders for a $500 million stake in its Barnett Shale midstream properties.
Chesapeake will contribute substantially all of its midstream assets in the Barnett Shale as well as most of the company’s nonshale midstream assets in the Arkoma, Anadarko, Delaware and Permian basins. The transaction is expected to close this month.
The deal will provide additional money for Chesapeake’s operations.
Chesapeake has large lease holdings in major shale gas plays such as the Barnett, the Haynesville in Louisiana and the Marcellus in the Appalachian area in the eastern United States.

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