Sunday, August 26, 2012

Chesapeake Sells Midstream Assets For $4B, Directors Resign

In recent trading, embattled natural gas giant Chesapeake (CHK) was rising 0.2% to $17.88 following its announcementthat it will sell its midstream assets for more than $4 billion.

The company said that Global Infrastructure Partners will buy its stakes in Chesapeake Midstream Partners (CHKM) for for $2 billion in cash, while the private equity firm will pay another $2 billion for Chesapeake Midstream Development L.P. and other related assets.

The cash will help Chesapeake as it seeks to lower its debt level to $9.5 billion by year-end and make up for a $10 billion cash shortfall, as the company struggles with record low natural gas prices and the cost of previous acquisitions.

In addition, the company announcedthat two board members, V. Burns Hargis and Richard K. Davidson, resigned after only garnering 26% and 27%, respectively, of votes in their re-election bid. Both were running unopposed.

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