Oklahoma-based Chesapeake Energy Corp. on Monday announced a $2.6 billion asset sale that will cut debt and fund drilling after slumping natural gas prices eroded its cash flow.
The energy giant sold shares in a new subsidiary to an investment group led by a Blackstone Goup LP-led affiliate that includes TPG Capital and EIG Global Energy Partners LLC.
The agreement gives the buyers a share of royalties in the Cleveland and Tonkawa drilling areas in Oklahoma and a 6 percent annual distribution.
Chesapeake also agreed to sell Morgan Stanley 10 years worth of future gas output from the Anadarko Basin Granite Wash for about $745 million.
In a third deal, Chesapeake is selling Exxon Mobil Corp. 58,400 net acres of leases in Oklahoma's Texoma Woodford play for about $590 million in cash before certain costs and adjustments.
The moves appear to part of Chesapeake's plan to sell $17.5 billion in assets by the end of 2013 to plug a cash-flow problem aggravated by low prices for natural gas.
Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.
Rig Count Interactive Map by Baker Hughes, an energy services company.
Shale Sheet Fracking, a Youngstown Vindicator blog.
The Ohio Environmental Council, a statewide eco-group based in Columbus.
Earthjustice, a national eco-group.
People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.
Concerned Citizens of Medina County, a grass-roots group.
No Frack Ohio, a Columbus-based grass-roots group.
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Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.
Allegheny Front, environmental public radio for Western Pennsylvania.