Chesapeake Energy to Revise Wyoming Pact
October 19 2016 - 5:40PM
Dow Jones News
By Josh Beckerman
Chesapeake Energy Corp. (CHK) will revise its gas-gathering and
processing agreement with Williams Partners LP (WPZ) and Crestwood
Equity Partners LP (CEQP) for Wyoming's Powder River Basin, moving
from a cost-of-service arrangement to a fixed-fee structure.
In a statement, the companies said the simplified fee structure
will help "improve the economics on both the drilling and midstream
operations."
Chesapeake Chief Executive Doug Lawler said the revision will
enable the company to accelerate its development plans and improve
margins.
The new agreement is expected to include minimum revenue
guarantees supporting a transition to a new fixed-fee structure
over the next five to seven years.
Williams Partners and Crestwood are partners in the Bucking
Horse processing plant and the Jackalope Gas Gathering System.
Williams Partners has a role in another recently announced
Chesapeake move. In one of several transactions connected to
Chesapeake's plan to exit the Barnett Shale, Chesapeake said in
August that it would pay $334 million to Williams to get out of a
pipeline contract.
In September, activist investor Carl Icahn exited more than half
of his stake in Chesapeake, citing tax-planning reasons.
Write to Josh Beckerman at josh.beckerman@wsj.com
(END) Dow Jones Newswires
October 19, 2016 18:25 ET (22:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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