OKLAHOMA CITY -- Chesapeake Midstream Partners (CHKM) announces that Global
Infrastructure Partners has agreed to acquire all of Chesapeake Energy Corp.’s
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 says its 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.
CHKM affirms ebitda (income before interest, taxes, depreciation
and amortization) 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.
J. Mike Stice, Chesapeake Midstream Partners'' CEO, comments,
"I''m excited that GIP has made this commitment to acquire a larger
ownership stake in CHKM. GIP has been an outstanding sponsor and partner for
CHKM over the past three years and I look forward to the opportunity to continue
that relationship. This new ownership structure creates an independent MLP and
enhances CHKM''s ability to execute on its low-risk business model and industry
leading growth opportunities."
Matthew Harris, GIP Partner, commented, "GIP is pleased
to be able to make a new investment in CHKM. We believe in the best in class
business model, the strategic asset base and the outstanding management team.
CHKM has demonstrated industry leading performance since our initial investment
and the business is a strong fit for our portfolio. We think the new ownership
structure provides a stable platform for executing on the vast growth
opportunities in the business."
Chesapeake Midstream Partners, L.P. CHKM -2.06% is the
industry''s largest gathering and processing master limited partnership as
measured by throughput volume and owns, operates, develops and acquires natural
gas gathering systems and other midstream energy assets. Headquartered in
Oklahoma City, CHKM''s operations are focused on the Barnett Shale, Haynesville
Shale, Marcellus Shale and Mid-Continent regions of the U.S.