Chesapeake Offloads CHKM Stakes - Analyst Blog
05 7월 2012 - 10:45PM
Zacks
Natural gas giant
Chesapeake Energy Corporation (CHK) has wrapped up
its asset sale deal with private equity firm Global Infrastructure
Partners (”GIP"). Under the deal, Chesapeake sold its pipeline
properties for a total cash consideration of $2 billion.
Last month, Chesapeake, the second
largest natural gas producer in the U.S., proposed to sell its
interests in Chesapeake Midstream Partners LP
(CHKM) to GIP, as part of the three-tier asset sale pact. The
closure of the asset sale deal allows GIP to own all of the general
partner interests and 69% of the limited partner units of
Chesapeake Midstream.
Chesapeake is also in the process
of disposing certain Mid-Continent gathering and processing assets
to Chesapeake Midstream Partners. Again, in the other tranche of
the pact, the Oklahoma City-based company will sell its stakes in a
subsidiary – Chesapeake Midstream Development LP –
for an extra $2 billion to GIP. Importantly, the total divestiture
will allow Chesapeake to shed its earlier announced capital
expenditure by $3 billion over the next three years.
The company sold Chesapeake
Midstream properties comprising pipeline networks in Texas,
Louisiana, Pennsylvania and other gas-producing states. As of March
31, 2012, it had 3,953 miles of pipeline. About 75% of the
partnership’s revenue is generated from Chesapeake Energy, while
the balance comes from Total SA (TOT) and
Statoil ASA (STO).
Of late, Chesapeake has been in the
news as it is under pressure to fund its capital budget amid
diminishing cash flows on the back of falling natural gas prices.
The company intends to offload as much as $11.5 billion to $14.0
billion worth of assets this year in order to bridge the funding
gap of $9 billion to $10 billion.
Chesapeake holds a Zacks #3 Rank,
which is equivalent to a Hold rating for a period of one to three
months. We maintain our long-term Neutral recommendation for the
company.
CHESAPEAKE ENGY (CHK): Free Stock Analysis Report
CHESAPEAKE MIDS (CHKM): Free Stock Analysis Report
STATOIL ASA-ADR (STO): Free Stock Analysis Report
TOTAL FINA SA (TOT): Free Stock Analysis Report
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Access Midstream Partners L.P. (NYSE:CHKM)
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Access Midstream Partners L.P. (NYSE:CHKM)
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