New Chesapeake Energy joint ventures worth $3.4B

Staff report

Chesapeake Energy Corp. has announced two joint-venture agreements worth a total of $3.4 billion.

The Oklahoma City-based company announced Thursday it has entered into a letter of intent with an “undisclosed international major energy company” for an industry joint venture.

The undisclosed company will receive a 25-percent stake in approximately 650,000 acres owned by Chesapeake, which will receive $2.14 billion.

Chesapeake will operate the joint venture and will conduct all operations. The deal is expected to be complete by year’s end.

It is unknown when Chesapeake will reveal the company’s name; an email to a company spokesman was not returned Thursday afternoon.

A conference call is scheduled today, during which company officials also will comment on its third-quarter earnings report.

Revenue rose 54 percent to $3.98 billion. Its profit rose 65 percent, jumping from $558 million to $922 million and earnings per share leaped from 75 cents to $1.23, beating analysts’ expectations.

In the second agreement, Chesapeake agreed to sell $500 million of perpetual preferred shares of its newly-formed CHK Utica LLC business to EIG Global Energy Partners, an independent asset management firm in the U.S., Australia and the U.K.