Wednesday, September 12, 2012

Chesapeake Sells Most Permian and Midstream Assets






Anonymous said...

I wonder if their selling price for the gas will change for the better once they sell CEMI.

Robert Hutchinson said...

Unsure, but I have my doubts.

One complaint from analysts was the significant forward quantity commitments that CHK made in selling the midstream assets. As far as I know they haven't publicized any information about any discounts to market prices or the like, but given that the assets sold for more than analysts expected, I'd be willing to suggest that CHK may have given the buyers a pretty good deal in exchange for more cash upfront.

Unfortunately, if that is true (and it's only my speculation), that would not benefit the company long-term, nor would it benefit the royalty owners.