Chesapeake Energy Corporation to sell $4 billion in assets

Chesapeake Energy Corporation to sell $4 billion in assets

oklahoma city

Chesapeake Energy Corporation’s announced today it intends to sell more than $4 billion in assets on the same day its board of directors is scheduled to meet with a group of investors eager for change at the company.

Chesapeake plans to sell its midstream assets in three separate transactions. The sale will enable the company to reduce capital expenditures by $3 billion over the next three years, according to a Chesapeake press release.

Chesapeake will sell its interest in Chesapeake Midstream Partners, L.P. to Global Infrastructure Partners for $2 billion.

These deals would bring asset sales so far this year to $6.6 billion. Biju Perincheril, an analyst at Jeffries & Company, has estimated the company needs to sell at least $7 billion worth of assets this year or risk violating the terms of some of its loans.

Despite the sale there are still questions about what will happen at the company’s annual meeting today. Chesapeake has agreed with Carl Icahn and Southeastern Asset Management, its largest shareholder, to replace four of nine board members with directors they choose. It plans to name a new independent board chairman by June 22.

A number of analysts have welcomed the board changes and boosted their rating of the stock.

See Saturday’s Vindicator for an update on the Chesapeake annual meeting.