Chesapeake Energy flag: flutters in the wind
Chesapeake forms new joint venture
Chesapeake Energy Corporation said it has agreed to sell a 50% stake in some natural gas gathering and processing assets for $588 million in cash to a joint venture it formed with a New York based private equity fund.
The energy company contributed all its midstream assets in the Barnett Shale and most of its non-shale midstream assets in the Arkoma, Anadarko, Delaware and Permian basins to a joint venture to be formed by Chesapeake Midstream Partners LLC (CMP) and the private equity fund, Global Infrastructure Partners.
The Chesapeake parent company will retain a 50% interest and the joint venture will purchase the remaining half in a transaction expected to close later this month.
Chesapeake also said it will close a new $500 million secured revolving bank credit facility agreement that matures in September of 2012. The new facility will partially fund expenses associated with building additional natural gas gathering systems and general corporate purposes.
The company will amend and restate an existing lending agreement on its midstream assets to reduce the total capacity to $250 million from $460 million, among other changes, reported Reuters.