China Resources Beer (TG:CHK)
Historical Stock Chart

From Jun 2019 to Jun 2024

U.S. natural gas producer Chesapeake Energy Corp. (CHK) said Thursday it will form a joint venture with private equity fund Global Infrastructure Partners to own and operate some of its mid-stream gas equipment and services.

Ownership of the new venture, Chesapeake Midstream Partners LLC, will be 50-50 between Chesapeake and Global Infrastructure Partners, which will pay Chesapeake $588 million in cash for its stake. Chesapeake will contribute all of its midstream assets in the Barnett Shale in Texas, as well as most of its non-shale midstream assets in the Arkoma, Anadarko, Delaware and Permian Basins.

Chesapeake Senior Vice President J. Mike Stice will serve as chief executive of the joint venture, the company said.

"We believe CMP will become one of the premier natural gas gathering businesses in the industry and serve as an attractive vehicle for monetizing additional Chesapeake gathering systems as they become more fully developed," Chesapeake Chief Executive Aubrey McClendon said in a statement.

Chesapeake said it would operate its other mid-stream assets in the Fayetteville Shale, Haynesville Shale, Marcellus Shale and other locations through a separate company called Chesapeake Midstream Development LP.

The joint venture is raising $500 million in revolving bank credit to build additional natural-gas gathering systems and fund corporate expenses. Chesapeake plans to reduce the size of an existing lending agreement for its mid-stream assets by nearly half, to $250 million.

Shares of Chesapeake were trading after-hours Thursday about 0.8% lower, at $27.60.

-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; cassandra.sweet@dowjones.com

Order free Annual Report for Chesapeake Energy Corp.

Visit http://djnewswires.ar.wilink.com/?link=CHK or call 1-888-301-0513