Chesapeake Energy sells unit for $865 million

(AP)? OKLAHOMA CITY ? Chesapeake Energy Corp. plans to sell a pipelines unit to an affiliated company for $865 million, its latest asset sale.

Chesapeake Energy, the country's second largest natural gas producer, has been cutting debt by selling off company assets.

Chesapeake Midstream Partners LP, which was formed by Chesapeake Energy and another company, went public in July 2010. It said Wednesday that it had agreed to acquire Chesapeake Energy's Appalachia Midstream Services LLC unit, boosting its share of a pipeline that connects to a major shale formation.

As a result of the Appalachia Midstream Services LLC acquisition, Chesapeake Midstream Partners will own about 47 percent of assets that consist of about 200 miles of gathering pipeline in the Marcellus Shale.

Chesapeake Midstream Partners said it will finance the transaction with $600 million drawn from its revolving credit line and 9.8 million common units. That increases Chesapeake Energy's limited partnership ownership of Chesapeake Midstream Partners to 46.1 percent from 42.3 percent.

The acquisition is expected to close by Friday.

Source: http://feeds.cbsnews.com/~r/CBSNewsGamecore/~3/EJQlVqIQQt8/

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