Chesapeake Energy sells its Barnett Shale assets to Saddle Resources
In lieu of proceeds, Saddle Resources will provide a lump sum payment to Williams Partners as settlement for terminating Chesapeake's midstream contracts in the Barnett. Together, Saddle Resources and Chesapeake will pay US$774 million to Williams Partners (US$334 million from Chesapeake, US$420 million from Saddle Resources) to terminate a 20-year gas gathering and shipping contract Chesapeake had entered into in 2012. Plagued by low commodity prices and liquidity concerns, Chesapeake is positioning the company to focus on its core strength - delineating, developing, and growing unconventional plays. The Barnett failed to attract capital within the company's portfolio due to onerous gathering and transportation contracts and declining production. This strategic move improves Chesapeake's medium-term liquidity, financial liabilities, and operational flexibility.