Chesapeake Energy has sold certain of its producing assets in the Anadarko and Arkoma basins in the US, as part of its fourth volumetric production payment transaction.
According to the company, through the volumetric production payment transaction (VPP), it conveyed a royalty interest to investors associated with Argonaut Private Equity. The purchase was financed by GS Loan Partners, an affiliate of The Goldman Sachs Group.
The assets include reserves of approximately 98 billion of cubic feet equivalent and current net production of approximately 60 millions of cubic feet equivalent per day for proceeds of $412 million. Chesapeake retained drilling rights on the properties below currently producing intervals.
Earlier, the company had announced its intention to complete a VPP by 2008 year-end as part of its plan to build larger cash reserves over the next two years. The transaction, which closed on December 31, 2008, will be treated as a sale for accounting purposes and the company’s reserves will be reduced accordingly.
Chesapeake Energy Corporation is a producer of natural gas in the U.S. Headquartered in Oklahoma City, the company’s operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Barnett Shale, Haynesville Shale, Fayetteville Shale, Marcellus Shale, Anadarko Basin, Arkoma Basin, Appalachian Basin, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast and East Texas regions of the United States.