Factbox: Chesapeake's $13 billion to $14 billion asset sale program
(Reuters) - Chesapeake Energy Corp is working to sell $13 billion to $14 billion in assets in 2012 as the company presses to raise cash to meet an estimated $10 billion funding gap.
The company, which posted a jump in second-quarter profit on Monday after it sold its midstream subsidiary, said it has completed $4.7 billion of sales in the first half of 2012 and expects to announce deals for another $7 billion in assets in the third quarter.
The following are the deals that Chesapeake has already closed, as well as assets it would like to sell.
- $2 billion sale of its stake in its midstream master limited partnership (MLP), as well as the partnership's general partner to Global Infrastructure Partners. The deal was announced in June.
- $1.25 billion sale of preferred shares in a subsidiary called CHK Cleveland Tonkawa LLC. The purchasers were led by an affiliate of the Blackstone Group and included private equity firms TPG Capital Management LP and EIG Global Energy Partners. The sale was announced in April.
- $745 million natural gas production deal with an affiliate of Morgan Stanley. In that deal, called a volumetric production payment (VPP), Chesapeake receives cash up front for future oil and gas production in a 10-year agreement linked to some of the company's reserves and assets in the Granite Wash in Oklahoma. The VPP was announced in April.
- $590 million sale of 58,4000 acres in Oklahoma to a subsidiary of Exxon Mobil Corp. The deal was announced in April.
- $100 million in "other miscellaneous asset sales."
PENDING ASSET SALES
- Chesapeake has signed a letter of agreement to sell nearly all of its remaining midstream assets held outside of its MLP to Global Infrastructure Partners (GIP). Negotiations for that sale continue, but Chesapeake expects the value of the deal to be worth over $2 billion. GIP has the exclusive right to negotiate a deal for the assets until August 13.
- Chesapeake said on Monday it had signed a purchase and sale agreement for its producing assets in the Midland basin portion of the Permian basin in West Texas, but a purchase price was not disclosed.
- Chesapeake also said on Monday it is in talks to sell two other packages of assets in the Permian basin and hopes to enter into deals for those packages in the next month. It did not name the potential buyers for these packages.
POSSIBLE ASSET SALES
- Chesapeake has said it is looking for a joint venture for up to 2 million acres in the Mississippi Lime play.
- Chesapeake has also looked for interest in acreage it holds in Ohio, Northern Michigan, Wyoming, Colorado and east Texas, according to one of Chesapeake's advisers.
(Reporting By Michael Erman; editing by Andre Grenon)
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