Chesapeake Energy announced the sale of midstream compression assets for total proceeds of approximately $520 million to Access Midstream Partners and Exterran Partners. The sale comprises of 437 compression units and related assets owned by Chesapeake subsidiary MidCon Compression.
Access Midstream will buy 103 compression units with a combined capacity of approximately 200,000 horsepower for $160 million. The units service gathering systems in Ohio, Pennsylvania and West Virginia.
Exterran will buy 334 compression units with a combined capacity of approximately 440,000 horsepower for approximately $360 million. The units service gathering systems in Arkansas, Louisiana, Oklahoma, Texas and Wyoming.
Chesapeake's CFO, Domenic J. Dell'Osso, Jr., commented, "Chesapeake continues to streamline its overall portfolio to focus on our core assets. These sales are consistent with this strategy and will generate more than $500 million towards improving our balance sheet, while having minimal impact on our 2014 cash flow guidance."
In connection with the acquisition, Exterran and Access have entered into a seven-year contract operations services agreement, under which Exterran Partners will provide contract compression services to Access in regions including the Permian, Eagle Ford, Barnett, Anadarko, Mississippi Lime, Granite Wash, Woodford, Haynesville and Niobrara Basins.
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