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Chesapeake to Sell Permian Basin Assets for $6.9B

The company is selling assets to cover a $10 billion funding gap


Struggling Chesapeake Energy (NYSE:CHK) has agreed to sell is gas fields and pipelines in the Permian Basin to Chevron (NYSE:CVX) and Royal Dutch Shell (NYSE:RDS.A, RDS.B) for $6.9 billion.

Chesapeake has been selling its pipeline infrastructure at a rapid clip this year in order to raise $10 billion to cover a funding shortfall, Reuters noted.

Is Chesapeake Crawling Back?
Is Chesapeake Crawling Back?

CEO Aubrey McClendon has announced plans to raise between $13 billion and $14 billion through assets sales this year. He claims the company has raised 85% of that target. The asset sales appear to have mitigated the company’s short-term financial crisis.

Shares of Chesapeake Energy slipped fractionally in Wednesday morning trading.

The latest sales comes as the company tries to shift its focus from natural gas to crude oil. Natural gas prices have fallen sharply this year. Company officials said that some of the funds from this sale would go toward eliminating $4 billion in debt.

In addition to its financial troubles, the Chesapeake in under federal investigation relating to Michigan land acquisitions and leasing that may have violated antitrust laws.

In June, Chesapeake sold thousands of miles of Permian Basis pipelines and infrastructure to Global Infrastructure Partners for $4 billion.

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