NEW YORK (The Deal) -- Oklahoma City oil and gas company Chesapeake Energy (CHK) continued its disposal of non-core assets on Friday by inking two agreements to sell midstream compression assets for total proceeds of approximately $520 million.
Access Midstream Partners, also based in Oklahoma City, has agreed to purchase 103 compression units with a combined capacity of approximately 200,000 horsepower for $160 million from Chesapeake in one of the deals. The units service gathering systems in Ohio, Pennsylvania and West Virginia.
In a separate transaction, Houston-based Exterran Partners agreed to purchase 334 compression units with a combined capacity of 440,000 or so horsepower for about $360 million. The units, which are housed in Chesapeake subsidiary MidCon Compression LLC, service gathering systems in Arkansas, Louisiana, Oklahoma, Texas and Wyoming.
The transactions are part of Chesapeake's noncore divestiture strategy that the company has executed for more than two years.
"Chesapeake continues to streamline its overall portfolio to focus on our core assets," said the company's CFO, Domenic J. Dell'Osso Jr., in a statement. "These sales are consistent with this strategy and will generate more than $500 million toward improving our balance sheet, while having minimal impact on our 2014 cash flow guidance."
Earlier in the week, Chesapeake announced its fourth-quarter earnings results and a desire to sell or spin off its oil serrvices business Chesapeake Oilfield Services.Analysts suspect the division could fetch between $2.2 billion and $2.7 billion.
Chesapeake's last asset sale came on Jan. 13 when the company agreed to sell its 20% stake in fellow Oklahoma City exploration and production company Chaparral Energy for $215 million. The sale is part of the company's ongoing strategy to pare about $5 billion in noncore assets, in addition to the $13 billion or so in assets that were divested between 2009 and 2012.