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Chesapeake Midstream Partners, L.P. (CHKM), a limited partnership to own, operate, develop and acquire natural gas gathering systems, priced its IPO on 28th July at $21, higher end of the range, giving a first day return of 6.7%.

Business Overview (from prospectus)

We are a limited partnership formed by Chesapeake and GIP to own, operate, develop and acquire natural gas gathering systems and other midstream energy assets. We are principally focused on natural gas gathering, the first segment of midstream energy infrastructure that connects natural gas produced at the wellhead to third-party takeaway pipelines. We provide gathering, treating and compression services to Chesapeake and Total, our primary customers, and other third-party producers under long-term, fixed-fee contracts. Our gathering systems operate in our Barnett Shale region in north-central Texas and our Mid-Continent region, which includes the Anadarko, Arkoma, Delaware and Permian Basins. We generate the majority of our operating income in our Barnett Shale region, where we service approximately 1,700 wells in the core of the prolific Barnett Shale. In our Mid-Continent region, we have an enhanced focus on the unconventional resources located in the Colony Granite Wash and Texas Panhandle Granite Wash plays of the Anadarko Basin. Our systems consist of approximately 2,800 miles of gathering pipelines, servicing approximately 4,000 natural gas wells. For the three months ended March 31, 2010, our assets gathered approximately 1.5 Bcf of natural gas per day, which we believe ranks us among the largest natural gas gatherers in the U.S.

Offering: 21.3 million shares at $21 per share. Net proceeds of approximately $112 million will be used for debt repayment and $223.5 million will be used for capital expenditure.

Lead Underwriters: UBS Investment Bank (UBS), Citi (C), Morgan Stanley (MS), BofA Merrill Lynch (BAC), Barclays Capital (BCS), Credit Suisse (CS), Goldman, Sachs & Co. (GS), Wells Fargo Securities (WFC)

Financial Highlights:

Revenues for three months ended March 31, 2010 were $95.4 million...Operating expenses three months ended March 31, 2010 were $30.7 million...Operating income three months ended March 31, 2010 were $35.5 million...Net income three months ended March 31, 2010 were $34.9 million...

Competitors

iven that substantially all of the natural gas gathered and transported through our systems is owned by Chesapeake, Total and their working interest partners within our acreage dedications, we do not currently face significant competition for our natural gas volumes. In addition, Chesapeake and Total have dedicated all of their natural gas produced from existing and future wells located on lands within our acreage dedication in the Barnett Shale region, and Chesapeake has made a similar dedication in our Mid-Continent region.

In the future, we may face competition for Chesapeake’s production drilled outside of our acreage dedication and in attracting third-party volumes to our systems. Additionally, to the extent we make acquisitions from third parties we could face incremental competition. Competition for natural gas volumes is primarily based on reputation, commercial terms, reliability, service levels, location, available capacity, capital expenditures and fuel efficiencies. We currently anticipate that our competitors in our Barnett Shale region would include Energy Transfer Partners (ETP), Crosstex Energy (XTEX), Quicksilver Gas Services, Freedom Pipeline, Peregrine Pipeline, XTO Energy, EOG Resources (EOG), DFW Mid-Stream and Enbridge Energy Partners (EEP). We currently anticipate that our competitors in our Mid-Continent region would include Enogex, Atlas Pipeline Partners (APL) and DCP Midstream (DPM).

Additional Resources:

Source: Chesapeake Midstream Partners Priced IPO at High End of Range