Chesapeake Energy to Revise Wyoming Pact

   By Josh Beckerman 
 

Chesapeake Energy Corp. (CHK) will revise its gas-gathering and processing agreement with Williams Partners LP (WPZ) and Crestwood Equity Partners LP (CEQP) for Wyoming's Powder River Basin, moving from a cost-of-service arrangement to a fixed-fee structure.

In a statement, the companies said the simplified fee structure will help "improve the economics on both the drilling and midstream operations."

Chesapeake Chief Executive Doug Lawler said the revision will enable the company to accelerate its development plans and improve margins.

The new agreement is expected to include minimum revenue guarantees supporting a transition to a new fixed-fee structure over the next five to seven years.

Williams Partners and Crestwood are partners in the Bucking Horse processing plant and the Jackalope Gas Gathering System.

Williams Partners has a role in another recently announced Chesapeake move. In one of several transactions connected to Chesapeake's plan to exit the Barnett Shale, Chesapeake said in August that it would pay $334 million to Williams to get out of a pipeline contract.

In September, activist investor Carl Icahn exited more than half of his stake in Chesapeake, citing tax-planning reasons.

Write to Josh Beckerman at [e-mail]

(END) Dow Jones Newswires

October 19, 2016 18:25 ET (22:25 GMT)

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