Chesapeake In $520 Million Midstream Compression Assets Sale

Mar. 03, 2014 2:35 AM ETAQ, ACMP, APLP
NaveenS profile picture
NaveenS's Blog
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Seeking Alpha Analyst Since 2012

Senior Manager - Derrick Petroleum Services. Working in Oil & Gas Industry for 7+ years. Contributed significantly for Database development for Upstream transactions ( Initially worked as a 'Research Analyst' at Reuters. LinkedIn Profile: Google+: Naveen Seetharama

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.

In December 2012, Chesapeake entered into a definitive agreement to sell a substantial majority of its remaining midstream assets to Access Midstream Partners for $2.16 billion.

In September 2012, Chesapeake signed agreements to sell substantially all of its midstream assets for $3 billion.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Recommended For You


To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.