Chesapeake Energy closes Permian Basin asset sales

Chesapeake Energy Corp. has completed the sale of its previously announced asset packages in the Permian Basin.

The company sold its southern Delaware Basin assets in the Permian Basin to SWEPI LP, a subsidiary of Royal Dutch Shell plc; its northern Delaware Basin portion of the Permian Basin to Chevron USA Inc., a subsidiary of Chevron Corp.; and its producing assets in the Midland Basin portion of the Permian Basin to affiliates of Houston-based EnerVest Ltd. The Permian Basin assets sold produced approximately 21,000 barrels of liquids and 90 million cubic feet of natural gas per day during the 2012 second quarter, or approximately 5.7% of Chesapeake’s production during the quarter.

Total combined net proceeds from the three transactions, inclusive of preferential rights exercised by other parties, are approximately $3.3 billion, of which Chesapeake received approximately $2.8 billion in cash at closing. Payment of the remaining proceeds will be subject to certain title, environmental and other standard contingencies. With the net proceeds from the Permian transactions along with various other asset sale proceeds, the company will reduce the total outstanding balance on its existing term loans from $4.0 billion to approximately $1.2 billion by the end of October 2012. The company plans to fully repay the term loans by year-end 2012.

Jefferies & Company Inc. and Goldman, Sachs & Co. served as financial advisors to Chesapeake regarding the Permian Basin asset sales.

 

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

Whitepapers

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...

Reduce Engineering Project Complexity

Engineering document management presents unique and complex challenges. A solution based in Enter...

Revolutionizing Asset Management in the Electric Power Industry

With the arrival of the Industrial Internet of Things, data is growing and becoming more accessib...