Chesapeake Midstream Partners, L.P. (NYSE:CHKM) today announced that Global Infrastructure Partners has agreed to acquire all of Chesapeake Energy Corporation’s (NYSE:CHK) (Chesapeake) ownership interest in CHKM for $2.0 billion. The acquisition, which is expected to close by June 29, 2012, will result in GIP’s ownership of 100% of CHKM’s general partner interest and 69% of CHKM’s limited partner units. Concurrent with this announcement, GIP signed a letter agreement to acquire certain midstream assets from Chesapeake Midstream Development (CMD), Chesapeake’s wholly owned midstream subsidiary, and CHKM signed a letter agreement to acquire from Chesapeake certain Mid-Continent gathering and processing assets.
CHKM’s existing business model and strategic assets continue to provide a leading platform of organic and inorganic growth opportunities and the transaction supports an enhanced strategic emphasis on expanding services to additional third party producers. The letter agreements provide further opportunities with respect to growth assets in Chesapeake’s portfolio for years to come. CHKM remains committed to executing on an unchanged best-in-class business model. CHKM benefits from a contractual structure that contains fixed fee revenue terms, long-term acreage dedications, minimum volume commitments, fee redeterminations and annual fee escalations, each of which contributes to generating predictable, stable and growing cash flows. CHKM’s existing assets are located in leading basins and have over $1.2 billion of organic growth capital requirements during 2012 and 2013. Also unchanged is CHKM’s commitment to maintaining a conservative balance sheet and investment grade credit metrics. The management team remains unchanged and will continue to leverage all of these business strengths to deliver best in class investor returns with a low risk business platform.
Extending Financial Outlook through 2013
CHKM is affirming ebitda guidance for the twelve months ended December 31, 2012 of $475 million with expansion capital expenditures of $660 million and maintenance capital expenditures of $74 million. In addition, CHKM is projecting organic ebitda for the twelve months ended December 31, 2013 of $550 to $575 million with expansion capital expenditures of $550 to $600 million and maintenance capital expenditures of approximately $74 million.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV