News summary: Chesapeake sells $6.9B in assets
SOLD! Chesapeake is selling oil and gas resources and infrastructure in Texas and elsewhere for $6.9 billion to Shell, Chevron and others.
THE BACKGROUND: Low natural gas prices have hurt Chesapeake's ability to pay down its enormous debt load, so the company has a plan to sell up to $14 billion in assets this year to raise cash. Wednesday's sales gets them to $11.6 billion. Analysts say the company fetched a good price for its pipelines, processing facilities and other infrastructure, but they expected at least $1 billion more for its oil and gas resources.
THE DEAL: Chesapeake will sell land and drilling operations in the Permian Basin in West Texas to Shell and Chevron for $3.3 billion. It will sell most of its pipelines and storage assets to Global Infrastructure Partners for $2.7 billion. A series of smaller deals in Texas and elsewhere will raise another $900 million. The assets sold accounted for 5.7 percent of Chesapeake's second quarter oil and gas production.
