OKLAHOMA CITY -- Chesapeake Energy Corp. Monday provided details of a financing plan that would fund its capital expenditures through 2012 and reduce its long-term debt. The company said in a statement that it expects to receive $2 billion this year by selling off a portion of its midstream assets and service company assets, while it is banking on another $2 billion from two separate transactions involving Chesapeake-affiliated companies.
Chesapeake also reported that it's pursuing joint ventures in its Mississippi Line and Permian Basin shale plays, and may consider selling 100% of its Permian Basin position should an acceptable offer come forward. These ventures, plus various minor asset sales, could result in cash proceeds of approximately $6 billion to $10 billion for 2012. The company is hoping to complete these transactions by Sept. 30, 2012.
The transactions would bring Chesapeake's total monetization cash proceeds to between $10 billion and $12 billion, the company reported. The proceeds are "substantially in excess" of the company's planned capital expenditures for the year and would allow Chesapeake to meet its previously announced goal to reduce its long-term debt to no more than $9.5 billion by Dec. 31.
The company said it would issue another $1 billion in senior notes due in 2019 in order to refinance or partially refinance shorter term debt. Chesapeake plans to use the net proceeds from the offering, also announced Monday, to its revolving bank credit facility, which it anticipates tapping periodically to meet capital expenditure initiatives.
Published by The Business Journal, Youngstown, Ohio.