Chesapeake Energy sells assets in $2bn deal

US gas producer Chesapeake Energy has raised $2.16 billion through selling a package of pipelines - a substantial majority of its remaining midstream ass.

Acquiring the assets across Macellus, Utica, Eagle Ford, Haynesville and Niobrara shale plays is Access Midstream Partners.

The transaction is expected to close by the end of 2012 and with it will come new market-based gathering and processing agreements across a number of acreage dedication areas.

Chesapeake has already sold a number of midstream assets in Oklahoma and Texas this quarter, generating around $175 million.

It now expects to complete the sale of the midstream assets it has left, which include Mid-Continent among others, by the end of 2013's first quarter. It hopes to raise $425 million for this sale, which will bring the total money raised to $2.75 billion.

However, when including sales from the second and third quarters of 2012, which generated $2.125 billion, the final figure for the company's entire midstream exit will be around $4.875 billion.

"We are pleased to announce further progress towards our asset sale goals for 2012-13. We look forward to completing additional asset sales and achieving our goals of strengthening our balance sheet, tightening our asset focus and increasing returns to shareholders," said Aubrey K McClendon, Chesapeake's chief executive officer.

The final figures will, however, fall short of Chesapeake's initial target to make disposals worth $13 billion to $14 billion.

During 2012 the firm's shares have fallen a total of 30 per cent, thanks to concerns over its debts and corporate governance. It now aims to shift its production away from natural gas and towards oil, which it hopes will be more lucrative.

Serving as financial advisors to Chesapeake on the midstream transactions were Jefferies & Company, Inc and Goldman, Sachs & Co.

The firm was co-founded by Mr McClendon in 1989, beginning with just a $50,000 investment. It was named after his love of the Chesapeake Bay region.

Joseph Hutton