December 28, 2011 / 9:51 PM / in 7 years

Chesapeake raises $865 million in partnership deal

(Reuters) - Chesapeake Energy Corp said on Wednesday it sold natural gas pipeline and processing assets in the Marcellus Shale to its partnership, Chesapeake Midstream Partners for $865 million.

Chesapeake Midstream Partners will fund the deal, expected to close by December 30, with $600 million in bank financing and $265 million of its common units.

Master Limited Partnerships are corporate structures favored by energy companies. The partnerships pay almost no taxes and pass almost all profits along to investors, making them more capital efficient than other structures.

Chesapeake Energy, which has been an aggressive buyer of acreage to drill in North America, faces a funding shortfall next year and has been striking deals to close the gap.

Reporting by Anna Driver in Houston; Editing by Richard Chang

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